Salesforce.com (NYSE: CRM), the enterprise cloud computing company that specializes in marketing communications, bought Buddy Media for $689 million in cash and stock. Salesforce.com is already proud of its social network bona fides. The company says it has social network status with its Chatter, Rypple and Force.com. Whether these products are effective is another matter.
Buddy Media will help Salesforce.com because:
[I]ts platform allows customers to publish content, place and optimize social advertising and measure the effectiveness of social media marketing programs. As a result, customers can determine which content is driving the most engagement, test different strategies and understand which campaigns are delivering the greatest return on investment.
Buddy Media does not seem to yield much from its customer base. Salesforce.com announced that:
The acquisition is expected to increase revenues by approximately $20 million to $25 million, and to reduce non-GAAP EPS by approximately $0.14 to $0.15 in the second half of the year ending January 31, 2013, depending on the final acquisition date.
Buddy Media is a very small company that was lucky to get an offer from Salesforce.com, at least at the level at which the transaction will be done.
The same day the Salesforce.com announcement was made, Google (NASDAQ: GOOG) said it would buy social network toolbar company Meebo. The price is rumored to be $100 million. Meebo will be combined with Google+, the search company’s thus-far unsuccessful challenge to Facebook. Meebo allows users to use multiple instant message networks at the same time. Meebo’s success is questionable. It has been laying off people. It also has raised $70 million, which means the buyout price is barely a premium.
Facebook investors are not the only ones who paid what appears to be too much to get a piece of the social media market.
Douglas A. McIntyre
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