Enterprise social network site Yammer could be on the block, a month after Facebook's (Nasdaq: FB) disastrous initial public offering effectively froze technology IPOs, investment bankers said.
The likely buyer is Microsoft (Nasdaq: MSFT), the world's biggest software company, which has extensive enterprise software products that already serve the Fortune 500. So taking over Yammer, based in San Francisco, for a reported $1 billion would make sense.
For starters, Microsoft, based in Redmond, Wash., reported holding cash and investments exceeding $59.5 billion when its second quarter ended in March.
Microsoft is already an investor in Menlo Park, Calif.-based Facebook. It paid $240 million for a minority share in 2007. That stake is now worth more than $1 billion. Facebook is valued at $60.5 billion, based on Thursday's close.
Microsoft and Yammer declined comment on Thursday.
Complementing a principally consumer-focused social networking play in Facebook with enterprise social networking in Yammer would make business sense for Microsoft, sort of like having its cake and eating it.
Yammer and Facebook also share some common investors and directors, notably Peter Thiel, who made billions when eBay (Nasdaq: EBAY) acquired PayPal from him and others like Elon Musk, now head of Space Exploration Corp. and Tesla Motors (Nasdaq: TSLA).
Another Yammer director is Facebook's first president, Sean Parker, who co-founded Napster in 1999.
Two other public companies are in somewhat the same space. One is Jive Software (Nasdaq: JIVE), the Palo Alto, Calif., business social networking company whose shares have gained 25 percent since the December IPO.
Jive shares rose nearly 12 percent on Thursday, and another 5.6 percent on Friday, closing at $19.72, valuing the company at $1.22 billion.
The other is LinkedIn Corp. (Nasdaq: LNKD) of Mountain View, Calif., which reported 161 million members in the first quarter ended March 31. LinkedIn shares rose 3 percent on Thursday and nearly 4 percent on Friday, closing at $102.01, valuing the company at $10.54 billion.
Several other software companies also use enterprise social media, notably Salesforce.com (NYSEL CRM), which said it planned to acquire private Buddy Media for $745 million, as well as Oracle (Nasdaq: ORCL), the No. 1 database developer, which announced plans to buy Vitrue Inc. and Collective Media. Both analyze social media sites.
Three-year-old Yammer has raised $142 million from venture capital firms like U.S. Venture Partners and Charles River Ventures. It's also won a place in the Magic Quadrant of companies tagged by Gartner (NYSE: IT), often a sign that attracts an investor.
Yammer's corporate clients such as Ford Motor Co. (NYSE:F) and SuperValu (NYSE: SVU) use the network to train people and deliver product feedback.