Mediaboss Marketing

(MoneyWatch) Microsoft (MSFT) has agreed to acquire enterprise social networking company Yammer for $1.2 billion, according to a report in the Wall Street Journal. The move extends Microsoft's reach into corporate information technology and lets it compete more thoroughly against Google (GOOG) by bolstering its cloud computing offerings.

Yammer is one of a group of start-ups that has targeted so-called enterprise social networking, like a combination of Twitter and Facebook aimed at private use by companies. Such technology allows employees to keep abreast of each other's activities, which should promote collaboration and innovation. The only company in this space with an even higher profile is Jive Software, which had $77.3 million in revenue during 2011 and a net loss of $50.8 million.

Yammer raised an $85 million round of funding last quarter, bringing its total to $142 million since 2009. That set an estimated valuation of $500 million to $600 million, so those recent investors will roughly double their money.

[Update: According to information that MoneyWatch received from private company financial analyst firm PrivCo, Yammer's estimated revenue in 2010 was $10 million and $30 million in 2011, which means a year-over-year growth of 200 percent. That would make the deal worth 40 times its 2011 revenue.]

The company claimed 5 million corporate users in the first quarter of 2012 and penetration into more than 85 percent of the Fortune 500. Although the bulk of these users are unpaid, Yammer uses an interesting monetization model.

It allows people within a company to set up a private social network for free. But a company must pay for administrative control over employee use. By encouraging free use, Yammer hoped to create a grassroots movement in companies, build a dependency of usefulness, and eventually encourage revenue streams using a number of pricing models.

One of the company's strategic strengths has been its decision to create an open application programming interface, or API. That allows others to create additional and extensions, like integration into SAP's popular ERP software for running large organizations. In April it announced integration with Microsoft Dynamics, the software giant's customer relationship management platform.

The acquisition adds some important capabilities to Microsoft's software portfolio. The company already has a major collaboration platform in its SharePoint product, but many companies don't make thorough use of it. Yammer gives Microsoft a way to build collaboration and communication and extend its reach. Microsoft could then add administrative and other features to its existing software packages.

Yammer also brings Microsoft some important competitive advantages in cloud computing. It could help extend the capabilities of the cloud versions of Microsoft Office and make its offerings more attractive to companies that otherwise might consider Google's cloud applications and its Google+ social network.

The acquisition could help improve the lot of social network and Internet companies, which have felt a sting in the investment market since the problems of the Facebook (FB) IPO.

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Microsoft buys Yammer for $1.2 billion

SAN FRANCISCO (Reuters) - A Zynga Inc(ZNGA.O) executive overseeing one of the social gaming company's most successful games has left to join Identified, a startup social network for young professionals.

Brian Chu, formerly the lead project manager of Zynga's hit CityVille, said Friday he will be vice president of product at the San Francisco-based startup.

CityVille had been Zynga's biggest hit over the past year, only recently ceding its position as the most popular game on Facebook to another Zynga title, Texas HoldEm Poker.

In recent months, several notable mid-level executives have left Zynga, which went public in December but has suffered a steep fall in its stock price. In March Groupon Inc (GRPN.O), which runs the daily deals website, poached Curtis Lee, a Zynga director of product management.

Chu said he left Zynga amicably and with "the door open."

"It was an intense time and very stressful," Chu said. "But I wanted the opportunity to take on the challenge of something as big as professional identity and companies like LinkedIn."

Identified, which raised $21 million in its second-round venture capital financing, claims a registered user base of 10 million. The startup provides a resume-building and networking service for young professionals under 30 - similar to LinkedIn, but with "gamified" features.

(Reporting By Gerry Shih; Editing by Richard Chang)

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Zynga manager moves to social networking start-up

Here's a look at potential safeguards that companies may put in place in light of recent cases of alleged abuse and rape in youth-centric online communities.

Social networks catering to adolescents have a serious trust issue -- and justifiably so.

Location-based flirting app Skout and teen social-networking game Habbo were hit by reports that adults allegedly used their services to sexually prey on underage users, causing both sites to temporarily restrict access this week.

The incidents serve as a reminder of the potential risks that arise when a minor logs on to any social network, an issue that has gotten even more scrutiny with Facebook looking to possibly open its doors to users under 13. More importantly, it reinforces the notion that no network is truly safe, no matter the technology safeguards that are put in place.

"You can never know completely that the person at the other end of the conversation is a kid," she said.

Nevertheless, Skout and Habbo have quickly shifted into damage-control mode with attempts to reassure users and the media that it will improve the protection that it offers to its users. Both companies have said they are trying to upgrade their security measures, moderators, and technology.

Paul LaFontaine, CEO of Habbo parent company Sulake, did not respond to questions, but did post on the company blog, indicating that the company is working to "ensure that best-in-class moderation and detection systems are in place to create a safer and improved experience for our many responsible users."

Skout, likewise, has said it would look into upgrading its safeguards and take additional steps to protect its users.

Age limits One protective measure is age limits, which Skout has said it would look into for its community. But the measure has long been debated within the industry, particularly because it's usually ineffective.

"It's a huge problem. In most case, it really doesn't work," said Chris Babel, CEO of TRUSTe, a company that helps online companies address privacy concerns.

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Can social networks protect your kids?

GLENWOOD SPRINGS, Colorado Strawberry Days, meet the 21st century.

Colorado's oldest civic celebration, dating back to 1898, is now incorporating modern-day influences such as social networking and American Idol to celebrate Glenwood Springs' biggest event this weekend.

Our Strawberry Days social networking site is a great way for us to reach a wide network of people, said Dylan Lewis, pubic relations director for the event. Social media marketing is all about word of mouth, and this form of media helps us develop relationships.

Lewis worked with the Glenwood Springs Chamber of Commerce to create the new strawberrydaysfestival.com social networking site that invites members to join, comment, add content and view photo slide shows. The site is dedicated to all that is Strawberry Days in Glenwood Springs.

We've had about 100 members join. I've seen people comment, I remember going to Strawberry Days back in 1979.' But at the same time we're showing Strawberry Days to a whole new group of people, he said.

Facebook users can also follow event postings and updates on the Strawberry Days Festival page, which has already surpassed 1,000 likes in less than four months since its creation.

People just have a natural, genuine interest in Strawberry Days, from all over the state, especially on Facebook, Lewis said.

The Strawberry Days social networking sites help event organizers post such information as the Miss Strawberry Days candidates and information about the Glenwood Idol auditions that took place Monday, as part of events leading up to the festive weekend.

Glenwood Idol contest

Glenwood Idol is a local take on Fox's uber-popular reality TV singing competition, American Idol.

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Strawberry Days social networking brings talent to more than one stage

DUBLIN--(BUSINESS WIRE)--

Research and Markets (http://www.researchandmarkets.com/research/bv92fn/social_networking) has announced the addition of the "Social Networking & Social Media: 2012 to 2016" report to their offering.

Social media is a once-in-a-generation, global phenomenon that is changing the world, unquestionably for the better. Whether it is Caracas or Boston, Auckland or Budapest, anywhere where there is an internet connection, in fact, social media is deeply and irrevocably embedded in the online world.

In spite of having first emerged just ten years ago, by the end of 2012 1.9 billion people around the globe will be actively using social media services, which represents over 85 percent of the entire online population. By 2016, these figures will have increased to 2.5 billion and nearly 90 percent respectively.

While social media unquestionably delivers huge value to users right around the globe, the business aspects of this new industry display some strange characteristics, such as:

- In spite of its global reach, utility and pervasive nature, the actual value of the social media market is rather modest, at just USD 10.4 billion in 2012 and USD 19.4 billion in 2016. By way of comparison, the size of the worldwide online advertising market in 2012 will be USD 114 billion while the worldwide Pay-TV market will be worth USD 275 billion;

- When a like-for-like comparison is made with traditional media forms, like newspapers, television, books and radio, fundamental reasons mean that the social media industry is only able to harvest a small percentage of the value delivered to users: newspaper industry ARPUs are more than 12x larger than social media;

- The market value of creating the content that was added to Facebook in 2011 was USD 6.4 billion, compared with company revenues of USD 3.71 billion. Facebook effectively outsourced these costs to users, but has no plan to remunerate those users for their efforts, other than providing a free service;

- We project that Facebook's share of the worldwide social media market in 2012 will be in excess of 50 percent. With a total market size of just USD 19.4 billion in 2016, the social media market is not large enough to sustain the growth of Facebook for more than a few more years. and so the company must enter major, new markets.

This report explains these and many other aspects of the social media market in detail against a background of detailed company profiles (21 leading social media companies are profiles) and worldwide analysis (24 leading countries are profiled).

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Research and Markets: Social Networking & Social Media: 2012 to 2016