According to Bloomberg the deal could happen as soon as the end of Friday. If Yammer agrees to sell to Microsoft it would get the company a social element to its business products.
The deal would also bolster competition with Salesforce.com which obtained social tools after purchasing Buddy Media for $745m earlier this month.
Buying Yammer would also give Microsoft a leg up against Oracle which bought Virtue and Collective Intellect which analyze data on social networking sites.
Yammer was started in 2008 by David Sacks, the former COO at PayPal. The company is currently used by over 200,000 companies and is 100% cloud based.
Unlike Twitter and Facebook, Yammer offers an internal social network for companies where they own and control all their data on yammer.
In a 2011 interview, David Sacks told CBR how fast the company was growing.
"Salesforce claims four million users, we’ve got four million and we’re a younger company," said Sacks.
He also pointed out that an examination by Forrester showed Yammer provided "a ROI of 365% in just over four months" to businesses.
Although Sacks said the company was not profitable at the moment he pointed out that their main focus was to keep growing.
Angelika Kempf, a spokeswoman for Yammer, declined to comment on the potential deal, telling CBR "We are not commenting on speculation but see this as a validation of the social network market and space."
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