Microsoft Has Already Broken A Key Promise About Yammer's Independence

Business Insider

When Microsoft agreed to buy Yammer for $1.2 billion last summer, the companies emphasized one key point: The enterprise social network's team would stay in San Francisco and continue to report to CEO David Sacks.

Yammer has remained in the city, moving into an expansive new office.

But after a recent reorganization, not all Yammer employees are reporting to Sacks, Business Insider has learned.

That appears to contradict statements Microsoft and Yammer executives made at the time the deal was unveiled, as well as recent statements Sacks himself has made about how Microsoft is letting him run the company.

The way Microsoft is handling the integration of Yammer is a matter of intense interest inside and outside the company. People want to know:

  • if Microsoft can give Yammer resources and room to grow without being heavy-handed;
  • if Microsoft can retain entrepreneurial executives like Sacks and his top team.

The answers to those questions bear heavily on the likelihood Microsoft will profit from the money it has spent on Yammer, and its ability to woo other fast-moving Silicon Valley startups.

Dan'l Lewin, Microsoft's most senior executive in Silicon Valley, told Business Insider just a couple of weeks ago that the software giant wants to be hands-off with Yammer to preserve what makes it unique. 

Here are the details of the reorganization, according to informed sources we've spoken to with direct knowledge of the matter.

Yammer's disparate marketing functions used to report through different executives to Sacks.  Now corporate marketing, product marketing, and sales marketing form a single marketing group, reporting to an executive named Viviana Faga. ( Yammer's vice president of marketing, Dee Anna McPherson, is leaving the company, according to a note she posted on Facebook.)

It's not clear how big the marketing group at Yammer is, but about 50 Yammer employees include marketing in their job titles on LinkedIn. Yammer has about 450 employees.

Faga is a former Salesforce and Jive marketer who joined Yammer in May 2012, shortly before the Microsoft deal. She is well-regarded, according to a former colleague we spoke to.

Instead of reporting to Sacks, Faga will report to Jared Spataro, an executive in Microsoft's Office division.

At a conference in November, Spataro unveiled Microsoft's plan to sell Yammer in combination with SharePoint and Office 365, its major online-collaboration offerings.

Sacks continues to report to Office Division executive Jeff Teper,* and most Yammer employees will continue to report up to Sacks. 

Just not all—as Microsoft and Yammer repeatedly promised at the time the deal went through.

We asked Microsoft and Yammer for comment. They did not respond to our requests.

To be clear, this new organization may be the best thing for Yammer in the long term. A marketing organization that is well-integrated into Microsoft will likely be the best way to get a benefit from its immense sales force. We also understand that Yammer's executives, not Microsoft's, proposed this arrangement. 

But it goes against a promise Microsoft made at the time it bought Yammer—that the business would run as it did as a startup, under the undivided leadership of its founding CEO.

And that's already raising questions inside and outside Yammer.

When we shared these facts with one well-placed Internet executive, he simply said, "Wow."

Update: We'd previously reported that Sacks reported to Office Division president Kurt DelBene. In fact, he has reported to Office Division executive Jeff Teper since the close of the Yammer acquisition.



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