Microsoft is reported to be in talks to acquire business social network Yammer for in excess of $1 billion.

Bloomberg reports that a deal is close at hand and could be signed as early as tomorrow.

Acquiring Yammer would give Microsoft some much needed social networking to offer its business customers and would allow it to build Yammer into its other products.

The price being talked about for Yammer is similar to that which Facebook paid for Instagram and is arguably a better deal.

A deal with Yammer also would step up competition with Salesforce.com, which gained social-marketing tools through its $745 million purchase of Buddy Media Inc. earlier this month, and Oracle Corp, which recently bought two companies that analyze data on social-media sites — Vitrue Inc. and Collective Intellect Inc.

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft, declined to comment on a potential deal. Deanna McPherson, a spokeswoman for closely held Yammer, also declined to comment, Bloomberg reports.

Launched in 2008 Yammer, which originally launched as an enterprise microblogging service and has evolved to become a full-fledged enterprise social network, but unlike Twitter it is used exclusive internal by a host of businesses. While social media and productivity don’t sound like natural bedfellows Yammer is designed to get employees talking and boost their productivity in the process.

Individuals sign up using their corporate email address and invite others to join. From that point, they can use the tool to ask questions of other members of the group,such as: “What are you working on today?” Once that question has been answered, other members can join the thread. Old conversation streams are stored and everyone has the option of a profile. It has always been dubbed a bit like a corporate version of Twitter and now looks a little like Facebook (as you can see below).

According to TechCrunch in September 2010, the service is being used by more than three million users and 80,000 companies worldwide, including 80% of the Fortune 500.