Business software company Yammer Inc has agreed to sell itself to Microsoft Corp for more than US$1 billion, the Wall Street Journal reported, citing a person familiar with the matter.

It was not certain when the deal would be completed and formally announced, the Journal said.

San Francisco-based Yammer declined to comment, while Microsoft could not be reached for comment outside regular US business hours.

Yammer, which began in 2008 and provides enterprise social networking services, has raised more than US$142 million (S$178 million) in venture capital funding.

It says it counts more than 80 per cent of Fortune 500 companies as clients, and is backed by PayPal co-founder Peter Thiel, who also invested in Facebook.