Microsoft has bought Yammer, a cloud-based social collaboration tool Yammer, for $1.2bn.
The deal will boost the enterprise social networking capabilities in Office, SharePoint and other Microsoft collaboration products.
Founded in 2008, Yammer has five million users and operates like Facebook for communication within companies.
The firm will continue to be led by its CEO David Sacks as it becomes part of Microsoft’s Office Division, headed by President Kurt DelBene.
Yammer is used by firms including the motor giant Ford and the business services firm Deloitte.
Microsoft hopes the acquisition will make its range of software products more appealing.
Last year it bought the communications business Skype and is integrating it into its products, including its Office software which contributed 60% of its profits last year.
Yammer plans to continue to offer its service in the way it does currently.
Yammer’s chief executive David Sacks said: “When we started Yammer four years ago, we set out to do something big. We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”