Salesforce Purchase Of Buddy Media Examined

by , Jun 4, 2012, 10:18 AM
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As was widely rumored last week, Salesforce.com has agreed to buy social media marketing firm Buddy Media for nearly $689 million in cash and shares. “That’s almost exactly how much Salesforce.com generated in sales in the first quarter of this year as a whole ($695 million),” The Next Web notes.

Last week, Peter Kafka at AllThingsD predicted that the close would close north of $800 million. This week, he suggests that discrepancy can be accounted for in this line of the press release: “All of Buddy Media’s vested and unvested options, restricted stock and restricted stock units held by continuing employees will be assumed and converted into options, restricted stock and restricted stock units of salesforce.com.”

“Some have questioned whether Salesforce has made full use of its acquisition of [social media monitoring firm] Radian6 for $326 million, so people will be watching closely to see how Buddy Media is run,” TechCrunch writes. “Will it be given free reign to continue its business as usual or will there be some attempts to integrate the business into a wider offering?”

Not lost on anyone, this latest deal is part of a broader consolidation in the social media marketing space, and comes just weeks after Oracle agreed to buy the social marketing specialists at Vitrue for a reported $300 million.

Buddy Media has recently been bolstering its service suite. After acquiring Brighter Option earlier this year -- to gain the company's paid ad solution -- Buddy Media recently rebranded the software as BuyBuddy, a self-service offering advertisers can use to create, track and optimize campaigns on Facebook.

The cloud-computing company says it expects to close the transaction in the fourth quarter of 2012 -- or the end of its fiscal second quarter -- and expects to increase revenues by roughly $20 million to $25 million in fiscal year 2013 as a result of the deal.

Yet, as ZDNet notes, “Salesforce stated that the acquisition of Buddy Media is not expected to impact any results in the fiscal second quarter.”

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