Microsoft announced that it has struck a deal to acquire Yammer for $1.2 billion.

Yammer is a social networking outfit geared to business and it has some five million corporate users. The service allows companies to set up business oriented social networking sites and employees can use it for free, although businesses are kindly asked to pay for advanced services.

Microsoft CEO Steve Ballmer believes Yammer will contribute to the company’s growing portfolio of cloud services. Analysts believe Microsoft will try to integrate social components into collaboration tools.

Forrester Research analyst Rob Koplowitz said the acquisition could enable Microsoft to step up its game in social networking, tying in social services with its other business offerings, including email, unified communications and collaboration software.

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