Salesforce.com Snags Radian6 in Social Media Shopping Spree
Salesforce.com has signed an agreement to acquire Radian6 for US$276 million in cash and $50 million in stock.
Salesforce intends to use Radian6, a platform for social media monitoring, to help its clients track hundreds and millions of conversations on Facebook, Twitter, YouTube, blogs and other online communities, analyze them, and get real-time results. Radian6 currently has 2,400 customers, including big names like Pepsi and UPS.
Salesforce.com, a provider of CRM, business and enterprise management cloud services, has been fighting it out with IBM and Dell in the very competitive cloud computing market. The acquisition of Radian6's social intelligence technology will extend the value of all of its products, the company says.
Among other things, Radian6 will integrate conversations in public social networks into Salesforce.com's private corporate social network, Chatter.
Social networks are now widely used in businesss, so there is a growing need for companies to track social media sites.
"Social media has made every business recognize the value of paying attention to the voice of the customer," noted Radian6 CEO Marcel LeBrun. "Radian6's technology is built for the new norm of customer engagement -- real-time, two-way conversations that includes social channels."
Salesforce.com did not respond to the E-Commerce Times' request for comments by press time.
Business Has Gone Social
Radian6 will provide valuable analysis of the buzz of social networks.
"Salesforce has decided to ride on the consumerization-of-IT wave," Azita Arvani, principal of the Arvani Group, told CRM Buyer. "It is a savvy move that builds on the popularity of the social Web with consumers. It will make it easier for [Salesforce.com's] enterprise customers to make sense of social Web conversations and put that knowledge to good use."
Social networks provide a channel for companies to reach a massive number of people and communicate directly to customers.
"Of course, with valuations of Facebook reaching astronomical levels, from $50 billion a few months ago to $65 billion to now reportedly around $85 billion in secondary markets, the social Web is getting more and more popular," said Arvani.
Blending Salesforce.com with social media sites will give the tool more leverage.
"Integrated properly, the Radian6 solutions can also be a good complement to Saleforce's own Chatter enterprise social network," said Arvani. "With Chatter, enterprises can collaborate internally using social Web paradigms. Radian6 will add the capability to monitor external social Web conversations."
This could mean a boost for an already solid company. "Salesforce can, of course, charge more for this new service and add to the monthly subscription dues," said Arvani. "This Radian6 service can be a new stream of revenue for Salesforce."
Facebook, Meet the Cloud - Cloud, Meet Facebook
Social media and cloud computing are both producing new companies and new applications at a rapid pace.
"This is the latest in a long line of mergers and acquisitions in the intensely competitive cloud computing and social media markets," Laura DiDio, principal analyst at ITIC, told CRM Buyer.
"These arenas share two things: a very fast rate of change -- in terms of new product introductions and upgrades to existing product capabilities -- driven by A-list industry giants who have financial and brand name awareness clout and the willingness to use both to further their ambitions in these lucrative segments," she said.
Cloud computing companies benefit from offering a large array of products.
"To stand still for even a few weeks is to risk being left behind," said DiDio. "Salesforce.com is clearly unwilling to take a back seat to IBM, Dell or any of its rivals in the social media space. Hence, Salesforce.com -- which has a very deep war chest, as witnessed by the fact that it paid cash and stocks -- is investing and growing by acquisition. It's a smart, well-planned strategy, since this is the company's third such acquisition in the first three months of 2011."
Salesforce.com is using Radian6 to improve its capabilities.
"It's another important cog in the wheel," said DiDio. "Salesforce.com executives have obviously constructed both a short-term tactical and long-term strategic plan on how to protect their existing investment in Web content and again, extend their reach to encompass delivering social media content into the cloud. To achieve those goals, they've drawn up a shopping list which addresses the current gaps in their strategy and which companies they need to purchase in order to fill those gaps."
Facebook integration with Chatter will allow clients to consolidate more information into one place.
"Every little bit helps," said DiDio. "In this case, the ability to integrate Facebook feeds into Chatter is a big deal, because Facebook is extremely popular with over 500 million users and growing. To be able to provide this type of integration instantaneously gives Salesforce.com more credibility with users, existing and potential customers, as well as the financial community, which appreciates smart investments."