It was revealed on Monday that Salesforce.com (NYSE:
CRM
) has agreed to buy Buddy Media for $689 million. The deal will
be in cash, and it will see CRM cutting its full-year earnings
per share forecast.
On the surface, it appears to be a smart acquisition for
Salesforce. Buddy Media gives users the ability to publish
content and measure the usefulness and success of social media
marketing. Buddy's customers include Ford (NYSE:
F
), Hewlett-Packard (NYSE:
HPQ
), and Mattel (NASDAQ:
MAT
).
So right from the beginning, Salesforce is buying some very
high profile clients, but the deal brings more than a few big
names to the table. Social media marketing is still very new, and
the effectiveness is relatively hard to measure. Work is being
done constantly by many people to bring clarity to the field, and
all that we really know right now is that there is a very big
audience for ads on the net. It's just hard to read who is
reading what.
Buddy Media hope to change all of that and, if they can do as
they claim, then the acquisition will prove to be invaluable for
Salesforce.
The transaction sees CRM pay $467 million in cash, $184
million in stock, and $38 million in vested Salesforce options
and restricted stock units.
"Social media has caused the biggest transformation in
marketing since the Mad Men era, causing chief marketing officers
to completely re-think their strategies," said Marcel LeBrun,
senior vice president of Salesforce Radian6's social- media
analysis platform in a statement. "By bringing together market
leaders Radian6 and Buddy Media, we are doubling down on the
Salesforce marketing cloud to provide chief marketing officers
with the ability to manage the entire social marketing
lifecycle."
Following the deal, Salesforce is expecting full-year profit
of $1.45 to $1.49 per share, excluding items, down from its
earlier forecast of $1.60 to $1.63 per share.
Salesforce then raised its revenue outlook range to roughly
between $2.99 billion and $3.03 billion, from $2.97 billion to
$3.00 billion.
The company also said in a statement that the deal should be
concluded during the third quarter.
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