Microsoft's Billion-Dollar Buy -- Is It a Smart Move?

Microsoft is buying Yammer -- the self-described "Enterprise Social Network" -- and jumping into a space that's pretty robust. Recent IPO Jive Software has pulled back really strongly since April but is still above its IPO price. It's worth about $1.2 billion.

On June 5, Oracle bought Collective Intellect, a company that does social intelligence.

The day before that, salesforce.com bought Buddy Media for $689 million -- which focuses on social-media marketing -- and had bought its own social-media monitoring company Radian6 last year for $326 million. Before that, it had spent $212 million for the purchase of Heroku, a company with a cloud-based application platform focusing on -- you guessed it! -- social and mobile.

Obviously, this is a space that's very active among tech giants, and it's one where buying is more popular than internal R&D developments. While Eric wasn't a fan of Microsoft's costly Skype acquisition, he sees some very real potential for this buy to help improve not just Office, but keep Microsoft's Dynamics division competing with Oracle and Salesforce as well. To see his full thoughts, watch the following video.

Microsoft, Oracle, salesforce.com, and a host of other companies have pushed deeper into social integration across the past year. However, if you're looking to profit from the trend, there's a market leader dominating the business market that has growth rates smoking all these companies. We've created a new report, "Forget Facebook -- Here's the Tech IPO You Should Be Buying," that details a much better social-media stock that has a longer runway for growth than even Facebook itself. The report won't be available forever, so click here to get access today – it's totally free.

Eric Bleeker owns shares of no companies mentioned above. The Motley Fool owns shares of Oracle, Microsoft, and salesforce.com. Motley Fool newsletter services have recommended buying shares of salesforce.com and Microsoft, creating a bear put spread position in Salesforce.com, and creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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