Salesforce Splashes Out $689 Million on Buddy Media

Loading...
Loading...
It was revealed on Monday that Salesforce.com
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
F
, Hewlett-Packard
HPQ
, and Mattel
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.
Follow me @BCallwood.
Loading...
Loading...
Posted In: NewsM&ATechBuddy MediaConsumer DiscretionaryLeisure Products
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...