After rumors have been flying for the past couple of weeks, the news has just been confirmed that Microsoft is purchasing business networking application Yammer for $1.2 billion in cash, according to a press release.

Yammer has taken on funding of $142 million to date, $85 million being the latest round at a $5-600 million valuation. Microsoft says that it is going to continue development of the product, independent of the larger company.

“Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.”

CEO David Sacks says in Yammer’s PR that the company will remain under his direction:

“With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done with software that is built for the enterprise and loved by users.”

The companies are set to hold a joint conference in a few minutes. We’ll be tuning in so chirp up here with any questions you may have.

Image: amitchat via Flickr