Salesforce adds social marketing power with $2.5 billion ExactTarget deal
By Sayantani Ghosh and Gerry Shih
SAN FRANCISCO (Reuters) - Salesforce.com Inc, the biggest maker of online sales software, will pay $2.5 billion for marketing software maker ExactTarget Inc in Chief Executive Marc Benioff's most significant bet to date on the social marketing business.
Salesforce.com shares slid nearly 8 percent on investor fears that the bid, priced at $33.75 a share or nearly 53 percent above ExactTarget's Monday close, will depress margins in the near term. Some analysts also wondered how soon Salesforce.com's recent binge of acquisitions will translate into growth for the bottom line.
The ExactTarget acquisition is the biggest ever for Salesforce.com and its eighth in the past year. It comes less than 12 months after Salesforce.com paid $680 million for Buddy Media, another social marketing company that helps big brands manage Facebook and Twitter pages.
ExactTarget provides Internet-based marketing software used by businesses to personalize email and text messages and to run ad campaigns that use social media platforms. It has 6,000 customers, including Coca-Cola Co, Gap Inc and Nike Inc.
Salesforce.com sees the acquisition as a way to offer a more comprehensive suite of marketing products to its customers, which include multinational businesses like Toyota Motor Corp that are increasingly looking to advertise through Facebook and Twitter.
Salesforce, Oracle Corp and other companies that provide software services to businesses are seeking growth through aggressive acquisitions as their traditional businesses slow and smaller rivals take advantage of social media. Oracle has made 14 acquisitions since the beginning of last year.
M&A VACATION
Benioff on Tuesday hailed the acquisition as Salesforce.com's most important ever but signaled to Wall Street that he would now dramatically slow the pace of dealmaking.
"I really think what you are going to see is us taking a vacation from M&A for anywhere between probably 12 and 18 months," he told analysts on a conference call.
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Salesforce adds social marketing power with $2.5 billion ExactTarget deal