Salesforce's Buddy Media Buy Adds to Social Marketing Skills

Enterprise cloud computing contender Salesforce.com (NASDAQ: CRM) announced, after much buzz and rumors leading up to the news, that is has entered into a “definitive agreement” to acquire Buddy Media, a social media marketing firm, for approximately $467 million in cash and $184 million in Salesforce.com common stock, as well as $38 million in vested Salesforce.com options and restricted stock units. The acquisition is expected to close during the company’s fiscal third quarter, ending Oct. 31, 2012.

Simply put, Marc Benioff and Co. have their sites set on social media marketing and advertising: “By combining Buddy Media, the world’s leading social media marketing platform, with (recently acquired) Salesforce Radian6, the world’s leading social media listening platform, Salesforce.com will deliver the first comprehensive Marketing Cloud that will allow customers to listen, engage, gain insight, publish, advertise and measure social marketing programs.” Their press release also cites research projecting that “social advertising” will be the largest growth area of online advertising by 2013.

Salesforce is also perfectly aware of cloud moves SAP (NYSE: SAP) and Oracle (NASDAQ: ORCL) have made recently, a market reality that most likely drove the deal forward. Oracle acquired RightNow Technologies, Taleo and Vitrue, a Buddy Media competitor, while SAP bought Silicon Valley firms SuccessFactors and Ariba. For now Salesforce is the market leader, and it no doubt intends to keep it that way.

“Salesforce.com now has the No. 1 players in social listening and marketing – Radian6 and Buddy Media,” said Marc Benioff, chairman and CEO, Salesforce.com, in a prepared statement. “With CMOs surpassing CIOs in spend on technology within the next five years, our Marketing Cloud leadership will allow us to capitalize on this massive opportunity.”

About Buddy Media: Founded in 2007 by husband and wife team Michael and Kass Lazerow, the initial concept was to “empower chief marketing officers and agencies to organize their teams and optimize their social media marketing programs.” The platform allows customers to post content, optimize social advertising and monitor the effectiveness of social media marketing campaigns, thus helping them determine which content gets the most results, test strategies and increase ROI on ad campaigns. The platform’s reach extends to more than 1 billion consumers across Facebook, Google, LinkedIn, Twitter and YouTube. Buddy Media claims “eight of the top 10 advertisers” as customers, with almost 1,000 customers in total.

In a company blog, Buddy Media’s Michael Lazerow wrote: “This acquisition is the largest deal ever done by Salesforce.com. It is also the largest acquisition of a New York City tech company in the last five years. Quite simply, the offer was a great one and one that our board, shareholders and management thought made sense to take.” He added the “Buddy Media acquisition is not just a tuck-in deal for Salesforce.com. It will contribute to the future of the business.”