Yammer CEO David Sacks resigns, and Microsoft’s Yammer integration is the result of a company cutting costs in its current financial struggle.
Microsoft and social network company Yammer entered into an acquisition agreement back in 2012, two years ago, but Yammer’s retained its independence up until now.
During the negotiation/purchase period, David Sacks was CEO of Yammer. Sacks has remained the CEO of Yammer for the last two years, but Microsoft’s decided to pull the plug on Yammer and integrate the social network into its Office 365 offering.
No details have been given at this time, except to say that Sacks announced his own departure from Microsoft yesterday: “Thank you to my current and former YamFamily for 6 years and to Microsoft for the last two. I look forward to new adventures.”
Microsoft had this to say regarding Yammer integration into Office 365: “Since we acquired Yammer in 2012, we have been working together to bring the integrated benefits of enterprise social to all our Office 365 customers. As we’ve seen the Yammer experience extending throughout Office – giving people new ways to collaborate and work together – it’s now time to bring Yammer organization together with our Outlook and Office 365 Shared teams as the next logical step in delivering an integrated set of social, collaboration, and communication experiences that enable companies to work like a network.”
It is the case that, when companies are acquired, owner companies often integrate their services into existing products before shutting them down – so we’re not surprised to see Yammer integrated into current Microsoft offerings.
Beyond the fact that Microsoft’s integrating Yammer’s social network – and David Sacks’ resignation – we don’t know if Sacks’s resignation is forced due to Yammer integration, or if Sacks left for personal reasons. It’s likely that the former, rather than the latter, is true.
One main reason behind the change concerns Microsoft’s latest Nokia mobile acquisition and CEO Satya Nadella’s “mobile-first and cloud-first” philosophy that wants to eliminate redundancies. Keeping Yammer afloat while already integrating some aspects of Yammer is a redundancy that a company like Microsoft can’t afford, now that 18,000 employees (approximately 15% of MSFT’s workforce) have been laid off, and the company’s got to foot the recent $7.2 billion acquisition of Nokia’s mobile division. With such small market share, Microsoft’s got to make some financial sacrifices. Yammer is the latest, and, unfortunately, there’ll likely be more to follow.