Software giant SAP has held talks in the last few weeks to acquire Jive Software - but decided not to buy the company, according to sources.
Jive makes social applications for businesses including SAP, and has a market value of more than $1bn (£66m). But after a thorough review, SAP found that Jive's products overlapped too much with its own, and wouldn't add sufficient market share, Bloomberg reported.
Jive's shares rose by a high of 8.8 per cent to $17.16 after the news of SAP's interest had broken, giving the company a valuation of about $1.1bn.
SAP's interest in Jive follows a host of software and internet firms that have attempted to integrate social tools into their platforms to enable better collaboration for customers.
Recently, Microsoft, for example, bought enterprise social networking platform Yammer for $1.2bn (£795m) in July 2012.
More broadly, the software and technology industries have engaged in a spree of M&A activity.
SAP's arch rival, Oracle, bought online marketing companies Eloqua and Vitrue, while IBM last year spent $1.3bn (£821m) on Kenexa, which uses cloud-based technology to integrate people and processes through its social recruitment and talent management solutions.
At the end of last year, Salesforce.com CEO Marc Benioff boldly claimed that his company's strategy was to attempt to create "the Facebook for the enterprise". The software-as-a-service (SaaS) company offers a social collaboration tool called Chatter, which serves as a news feed similar to Twitter that can be tailored for the enterprise.
In 2011, Forrester Research estimated that the market for social enterprise software would grow about 60 per cent a year and reach $6.4bn by 2016.
