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Salesforce to Buy Buddy Media for Social CRM

Buddy Media lets marketers manage their presence on social sites like Facebook, Google, LinkedIn, Twitter and YouTube

As rumored last week, Salesforce.com Monday said it's going to buy Buddy Media for roughly $689 million in cash and stock.

Buddy Media lets marketers manage their presence on social sites like Facebook, Google, LinkedIn, Twitter and YouTube. They can publish content, place social advertising, measure the effectiveness of their social media marketing programs, determine which content is driving the most engagements, test different strategies and isolate the campaigns delivering the best ROI.

Salesforce already owns Radian6, a so-called social media listening platform, and will merge the two platforms together in its Marketing Cloud so it can offer the entire social marketing lifecycle.

Salesforce said it got interested in Buddy Media after Gartner predicted that CMOs will spend more on IT than CIOs by 2017 - and 15% of whatever they plunk down will be for CRM.

That may also explain why Oracle bought Buddy Media rival Vitrue a couple of weeks ago for what TechCrunch said was $300 million.

Buddy's nearly 1,000 clients include Ford, HP, L'Oreal, Mattel, eight of the top 10 global advertisers and ad agencies like Interpublic and WPP, an investor. Salesforce said it was attracted by the size of its major customers.

All Things Digital said last week that Buddy Media spurned an offer from Google to go with Salesforce.

Salesforce said it will pay approximately $467 million in cash and $184 million in common stock and $38 million in vested options and restricted stock units.

It calculates that the acquisition, expected to close by the end of October, should add $20 million-$25 million in revenue to its current fiscal year but cut earnings by 14 cents or 15 cents a share. As a result it tweaked guidance for the year to $1.45 to $1.49 on approximately $2.99 billion-$3 billion, less than the $1.63 on ~$3 billion Wall Street was already expecting.

Buddy Media raised $90 million in financing since getting started in 2007 from Softbank, Greycroft, Bay Partners, Institutional Venture Partners, GGV Capital, Zynga CEO Mark Pincus and VCs Ron Conway and Peter Thiel.

The Financial Times made the observation that Facebook, which Salesforce CEO Marc Benioff called the "new corporate homepage," lets companies market on its platforms for free, leaving Buddy Media, Vitrue and others like them make money on its free tools. Facebook, by the way, closed at an all-time low Monday: $26.90

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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