In the modern world of marketing, social media is a channel that cannot be ignored. It's a message Salesforce.com (NYSE:CRM) understands well and that's why they're spending big bucks to acquire Buddy Media.
After weeks of speculation, Salesforce today officially announced its intention to acquire Buddy Media in a cash and stock deal valued at $689 million. The deal will include $467 million in cash, $184 million in stock and $38 million in vested Salesforce options. The deal is set to close in Salesforce's fiscal third quarter.
During a Monday morning conference call to discuss the deal, Salesforce CEO Marc Benioff described the Buddy Media buy as Salesforce’s largest acquisition to date.
"We're doubling down on the Salesforce marketing cloud," Benioff said. "We absolutely believe that Buddy Media coupled with our incredible acquisition last year of Radian6 will help us capture more of this fast growing market and accelerate our growth."
Salesforce acquired social CRM vendor Radian6 for $326 million in March of 2011. Benioff said that by combining Buddy Media with Radian6, the Salesforce marketing cloud will become a clear choice for brands to listen and engage with their social marketing programs.
"For the first time CMOs will be able to manage the entire social media marketing lifecycle in one unified platform of customer information," Benioff said. "With this acquisition, Salesforce is perfectly positioned to capitalize in another high growth multi-billion dollar opportunity."
Benioff said Salesforce went through a rigorous vetting process before settling on Buddy Media as the best choice for an acquisition. He reviewed every company in the space and personally met with the CEOs of major contenders, Benioff said.
The social media space has been a busy one lately from an acquisition perspective. Salesforce rival Oracle acquired social marketing vendor Virtue for $300 million at the end of May.
For Salesforce, the ability to leverage existing assets to deliver better value with Buddy Media was key to the deal. Noting a strong common customer base between Radian6 and Buddy Media, Benioff said real synergies will result when everything gets connected back into Salesforce’s sales and service systems.
"The real leverage point is going to be our hundreds of thousands of customers that use our cloud CRM products that need to deeply integrate these social marketing services into what they are doing," Benioff said. "When we deliver that unified offering with Buddy Media the total power for our customers to manage all their information is just incredible."
The acquisition of Buddy Media will also help to expand Salesforce's growing sales channel for marketing professionals, Benioff said. "We expect that CMOs will spend more than CIOs on technology. What is happening is CMOs are tightly partnered with CIOs, but the CMO is the buyer in this case."