Microsoft bought Yammer for $1.2 Billion. Yammer is supposed to add Social Media to Sharepoint.

" Yammer now has more than 5 million corporate users, including employees at 85 percent of the Fortune 500. The service allows employees to join a secure, private social network for free and then makes it easy for companies to convert a grassroots movement into companywide strategic initiative."

So Yammer shares the same space as Microsoft Lync - Fortune 500. Who else can afford it? Same with Yammer and a private social network. Who else can afford it? Most SMB make do with consumer apps, like a Google Group mixed with Google apps and Hangout. I guess that's why Microsoft is having trouble with 365 . Well, Google plus the fact that Microsoft is bypassing their own channel with Office 365.

We are in the midst of great instability for all companies - AOL, Google, Yahoo, Microsoft, telcos, cellcos, book stores, the TV industry, and so much more.

The Internet isn't just communication. It is distribution. It levels the playing field. IN some ways it is a tilted windmill because it allows for some much flash mob type activity - BOOM! Hot, then gone.

A PR firm send me these comments from a Yammer competitor, apparently upset that Microsoft spent a billion NOT on them!

eXo founder and CEO, Benjamin Mestrallet, offers up his viewpoint as a key competitor in this space: "The fact that Microsoft is purchasing Yammer clearly means three things:"

"First, that SharePoint has failed to deliver the enterprise social capabilities that organizations are increasingly demanding."

"Second, that Yammer has been very successful at attracting individual users, but they've continued to struggle at the enterprise level, where IT organizations still have legitimate concerns about security, integration and manageability."

"Third, that Microsoft is willing to spend 1.2 billion dollars to play catch-up in this space. Yammer may enable Microsoft to offer a freemium social service, but it's going to have a hard time cost-effectively attaching SharePoint to that service because Yammer is multi-tenant and SharePoint is not. They'll sort out the integration eventually, but probably not quickly."

Integrated social aspects into enterprise software is challenging. I was riffing today about Gartner pushing this idea of cloud services integration. It is wildly expensive to program integration into web apps. Why wildly? Because when you are paying $5 per month per user, you don't want to spend $10K or more on integration.

One PR firm in town just went Cloud - mainly with Microsoft - not well integrated at all. And it will costs 5 figures at least to improve it - IF - and this is a big if - you can find someone who is capable of doing that integration.

We have seen time and again, mergers that never pan out. The synergies that never get realized. The back office systems that never get united. All of it for a bump in revenue, lost jobs, a stock price stabilizer, and a competitor taken off the street. It's all such corporate bull***t. How about you just make something that actually works - unlike, say, almost any version of Windows except maybe XP SP3? How about instead of marketing muscle and spend, you use that money on UX? Then the product will speak for itself. I can't even imagine what $500M in hack-a-thons and programming contests could have done for the current Microsoft product set.

UPDATE

independenceIT, provider of the complete Cloud Workspace, acquired Fort Lauderdale, Fla.-based Veddio Cloud Solutions, a cloud services management platform and aggregator for managed services providers (MSP).