Infotech Lead America: Salesforce.com is set to buy ExactTarget for $2.5 billion to strengthen CRM business.
The acquisition of ExactTarget will accelerate the growth and leadership of the Salesforce Marketing Cloud.
Founded in 2000, ExactTarget has more than 6,000 clients globally. Some of the major brands such as Coca-Cola, Gap and Nike use ExactTarget solutions to drive customer engagement, increase sales and improve return on marketing investments.
salesforce.com says the acquisition is expected to increase revenue by $120 to $125 million in 2013.
“Marketing was the fastest growing CRM category in 2012, growing at 21 percent,” said Yvonne Genovese, managing VP, Gartner’s Marketing Leaders Research. “We believe this growth will continue and marketing will be the largest growing CRM category through 2017.”
As the global leader in CRM, salesforce.com is number one in sales, service and cloud platforms. With the combination of Salesforce and ExactTarget, salesforce.com will become the leader in marketing.
salesforce.com on Tuesday said it would combine ExactTarget’s digital marketing capabilities with salesforce.com’s sales, service and social marketing solutions to create a world-class marketing platform across email, social, mobile and the web.
According to Gartner, by 2015 consumer technology companies will have switched one-third of their traditional marketing budgets to digital, and CMOs will outspend CIOs on information technology by 2017.
Marc Benioff, chairman and CEO, salesforce.com, said: “The addition of ExactTarget makes Salesforce the starting place for every company and puts salesforce.com in the pole position to capture this opportunity.”
In May 2013, Reuters reported that Salesforce is facing rising competition from Oracle, SAP and Microsoft, which are intensely pursuing its customers and making splashy acquisitions to match Salesforce’s product offerings.
Salesforce.com had a first-quarter net loss of $67.7 million or 12 cents a share, compared to a net loss of $19.5 million, or 4 cents a share, in the same quarter last year. During the quarter ending in April, Salesforce’s subscription and support costs rose faster than its revenue, pushing its bottom line further into the red.
The acquisition — the biggest ever for Salesforce.com — is its eighth in the past year and its second big purchase focused on social media. It acquired Buddy Media, which helps big brands manage Facebook and Twitter pages, in August.