Oracle Buys Datalogix In Quest To Be A Data Powerhouse

Oracle made its data play clear after acquiring DMP BlueKai earlier this year, and on Monday reaffirmed its commitment to data by acquiring Datalogix, an audience-targeting firm known for connecting offline sales to online ads. The deal is expected to be in the “high hundreds of millions,” per Brian Wieser, senior analyst at Pivotal Research.

Datalogix’s role in the advertising market is “very important,” according to Yory Wurmser, analyst at eMarketer -- as its ability to link online ads to offline sales is "unrivaled." Technology giants, most notably Facebook, use Datalogix for analytics and attribution.

However, the fact Datalogix does work with such large companies has some calling for the Federal Trade Commission (FTC) to “closely scrutinize the proposed deal.” That’s what Jeff Chester, executive director of the Center for Digital Democracy, wrote in a statement this morning.

Through the data [Datalogix] gathers on what we buy, and with its relationship with Facebook and other powerful marketers, Datalogix consists of a online treasure trove of data on Americans,” wrote Chester. “The Oracle deal announced today follows its recent acquisition as well of BlueKai, which holds reams of information on consumers.”

Chester calls for the FTC to review whether the Oracle-Datalogix deal requires the FTC to add additional safeguards to its 20-year consent decree with Facebook. The 20-year decree, which was settled in late 2011, notes that Facebook is barred “from making any further deceptive privacy claims, requires that the company get consumers' approval before it changes the way it shares their data, and requires that it obtain periodic assessments of its privacy practices by independent, third-party auditors for the next 20 years.”

Wurmser acknowledged that privacy concerns have been “percolating for awhile when it comes to identifiable data,” and Datalogix does track emails through loyalty programs and the like, but the data is anonymized when sent to Facebook, for example. Wurmser said he wouldn’t expect privacy issues to “inhibit this transaction or cause a major level of concern,” but he did add that it gives Oracle “a lot of information.”

Despite the spate of ad tech deals the marketplace saw in 2014 --  which included noteworthy purchases from the likes of Facebook, AOL, Google, Twitter and Yahoo -- Pivotal Research’s Wieser believes the Oracle-Datalogix deals indicates that more M&A activity is on the horizon. That’s significant considering ad tech played its part in the biggest tech M&A boom since the dot-com bubble, per a recent Ernst & Young report.

This transaction will push total M&A past $8 billion for 2014, up from more like $3 billion in 2013,” wrote Wieser in a note this morning. “Further consolidation is inevitable next year with more activity from companies who have been traditionally focused on advertising and as other newer players -– like Oracle, Adobe and Salesforce –- increasingly make their presence known.”

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