Just months after betting on Rypple, Salesforce .com is moving to acquire Buddy Media for about $689 million in cash and equity. Buddy Media is a social media marketing platform that debuted in 2007.
Buddy Media launched as a tool to help chief marketing officers (CMOs) and agencies organize their teams and optimize their social media marketing programs. The Buddy Media platform lets customers publish content, place and optimize social advertising and measure the effectiveness of social media marketing programs.
"Salesforce.com now has the number one players in social listening and marketing -- Radian6 and Buddy Media," said Marc Benioff, chairman and CEO of Salesforce.com. Benioff also tipped his motive for acquiring the company when he pointed to Gartner research that shows CMOs will surpass CIOs in spend on technology within the next five years.
The Marketing Cloud Play
With the Buddy Media buy, Salesforce.com is looking to capitalize on what Benioff sees as a "massive opportunity." Buddy Media lets companies connect with more than 1 billion customers across the likes of Facebook, Google, LinkedIn, Twitter, and YouTube.
Buddy Media has made a name for itself in the social media industry. Eight of the top 10 advertisers use its social media platform. In all, Buddy Media has nearly 1,000 customers, including Ford, Hewlett-Packard , L'Oreal, Mattel, IPG (Interpublic Group), Omnicom, Publicis and WPP.
The Radian6 and Buddy Media acquisitions beef up the Salesforce Marketing Cloud, which is working hard to leverage the opportunities social networks are driving in the marketing industry. EMarketer predicts social advertising will be the largest growth area of online advertising by 2013.
By combining Buddy Media, the world's leading social media marketing platform, with Salesforce Radian6, Salesforce.com aims to deliver a Marketing Cloud that lets customers listen, engage, gain insight, publish, advertise and measure social marketing programs. In other words, Salesforce is trying to empower CMOs to manage the entire social marketing lifecycle.
Buying vs. Building
We caught up with Charles King, principal analyst at Pund-IT, to get his take on Salesforce.com's latest grab. He told us the Salesforce.com's Buddy Media buy was a smart decision and a good example of when buying an established company with an existing user base makes more sense than attempting to build something on your own.
"The buy-it-build-it quandary for IT vendors has been around for a long time, and the success of social media companies has been highly variable," King said. "That gives vendors like Salesforce a lot to pick and choose from. In the case of Buddy Media, they've very intelligently chosen a company whose technologies and feature set and user base matches well to Salesforce's own."
For a company like Salesforce, King added, social media qualifies as an example of advanced collaboration . He said Buddy Media's technology should allow Salesforce to incorporate more sophisticated social functionality into its own product while also providing the company with a mature social brand that it can leverage individually.
"Given the consistent interest that social continues to drive, it wouldn't surprise me at all to see more acquisitions in this space in the coming weeks or months," King said. "It may be something that will enliven the summer doldrums."