Customer relationship management (CRM) integrated with social networks (aka "social CRM") is moving to the clouds. But the jury seems to be out regarding the future of this niche.
In a move that has focused attention on the trend, Salesforce.com Inc.today announced the purchase of online marketing startup Buddy Media for $689 million in cash and stock.
The deal follows Saleforce.com's purchase of Radian6, which monitors and measures social media, last April. It also follows the recent purchase by Oracle Corp. (Nasdaq: ORCL) of cloud-based social marketing firm Vitrue, which was founded in 2006 and claims McDonald's and American Express among its customers.
Buddy Media, founded in 2007, offers a suite of applications that allows companies to create customized, interactive content on social media sites and then track the activity that results. That's the key to making cloud-based CRM one of Saleforce.com's biggest businesses.
"Facebook has become the new corporate homepage," said Salesforce.com CEO Marc Benioff on a call with analysts today. And in a prepared statement, he noted: "With CMOs surpassing CIOs in spend on technology within the next five years, our Marketing Cloud leadership will allow us to capitalize on this massive opportunity."
Buddy Media boasts over 1,000 clients, including Ford, Hewlett Packard, L'Oreal, Mattel, and several big marketing agencies. Co-founder and CEO Mike Lazerow is quite the marketer in his own right, having hit the social media nerve with a video describing his very personal -- and very moving -- reaction to the deal with Salesforce.com:
Both Salesforce.com's and Oracle's stocks were trading lower today. And while that reflects the trend for the computer software market overall, there are skeptics who view all this "socializing" of cloud services suspiciously.
Here's how Jim Edwards of Business Insider Advertising put it:
The most interesting thing about the recent acquisitions of Buddy Media (by Salesforce.com) and Vitrue (by Oracle) is who didn't do the buying: The big Madison Avenue ad agency holding companies like WPP, Omnicom, Interpublic Group and Publicis.
...So this could go two ways: WPP et al. could come to regret not moving fast enough to snap up these companies. Or, if history is a guide, five years from now we'll be talking about the naivety of non-advertising companies thinking they can get into the marketing business via a few simple (and expensive) acquisitions.
Another source, author, consultant, and VC, Robert Rose, says he likes the deal "from an agility perspective," but he stated the following in an email to me today:
[I]t’s certainly a huge bet. Not just from a financial standpoint -- although by my quick back of the envelope calculation it's about a 15x multiple on Buddy Media’s revenue -- but rather a huge bet on the idea of Social -- and especially Facebook -- as a direct marketing channel for the enterprise.
I think the most interesting thing to watch will be to see if [Salesforce.com] can pivot into being a truly social company. It's one thing to center on managing a normalized database of names, titles and addresses through a pipeline -- and quite another to enable non-linear, conversational chaos for a global enterprise.
And there you have it. Social CRM may be headed for the clouds -- but whether it makes it there is a future hidden from our gaze.
I wonder if we are just starting to see a difference between the dot.com boom of the late 1990s and this new era of "Eh."
I think consumers and the financial markets in general didn't understand much of what was coming at them in the late 1990s, but much of it sounded cool and the Internet was definitely the future. Something had to come of it.
With things like Social CRM, some get it and most don't. And those who get it aren't universally sold it's the future.
In the end, I think consumers and investors are more jaundiced than they were 13 years ago and these neuvo companies have to work much harder to be captivating. They actually have to be able to demonstrate value, and that, in my view, is pretty hard in the social CRM space.
The ThinkerNet does not reflect the views of TechWeb. The ThinkerNet is an informal means of communication to members and visitors of the Internet Evolution site. Individual authors are chosen by Internet Evolution to blog. Neither Internet Evolution nor TechWeb assume responsibility for comments, claims, or opinions made by authors and ThinkerNet bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
Like other leading technology-using businesses, Walmart is starting to look like a vendor in its integration of the latest technologies to serve its customers. That's what led it to buy two Silicon Valley cloud startups this week.
IT executives are worried about business units that use social media, Dropbox, Skype, and other public clouds without working through IT. This "cloud sprawl" creates concerns about security, compliance, and other potential problems for the enterprise, according to a study.
Cloud computing helped Netflix score a big win this week, meeting a thousandfold increase in demand and driving the Internet video service provider back to profitability. It provided Netflix with "availability, scalability, and cost savings," chief executive officer Reed Hastings wrote in a letter to shareholders.
"Social Enterprise" is an increasingly trendy term, and Salesforce.com has been leading the way. At its Dreamforce conference last week, the theme was clear: From here on, enterprise applications must have social capabilities built in.
Enterprises are discovering that using social networking within the secure setting of a SaaS provider's network gives them an unusual opportunity to freely collaborate with partners, suppliers, and even competitors.
Showing results is the best way to win over social business doubters, according to Mary Maida, Medtronic lead information solutions manager. Internet Evolution's Mitch Wagner interviewed Maida at the E2 Innovate conference.
The medical instruments manufacturer looks to metrics to quantify its social business engagement, according to Mary Maida, Medtronic lead information solutions manager. Internet Evolution editor in chief Mitch Wagner interviewed Maida at the E2 Innovate conference.
A recent release of the popular TweetDeck app for Twitter power-users gives new life to software that had previously taken a wrong turn. Here's a quick walk-through of the new TweetDeck, to show you why it should be at the top of your Twitter toolkit.
Michael Brutsch, a.k.a. Reddit's Violentacrez, is a creep who posted borderline kiddie porn to the Internet anonymously, and got fired when outed by a media outlet. It's a cautionary tale even for people who aren't jerks and predators.
As social media make their way into company operations, IT'ers and engineers are using it to exchange ideas and collaborate on problem solving with others. But there is also a line to be drawn when it comes to proprietary information sharing.
The very low-tech "scrum" project technique introduces "crowd talking" to projects and also sets the entire crowd to problem solving. So far, these new social-media-style meetings appear to have supercharged project execution.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
Expert Integrated Systems: Changing the Experience & Economics of IT In this e-book, we take an in-depth look at these expert integrated systems -- what they are, how they work, and how they have the potential to help CIOs achieve dramatic savings while restoring IT's role as business innovator. READ THIS eBOOK
your weekly update of news, analysis, and
opinion from Internet Evolution - FREE! REGISTER HERE
Wanted! Site Moderators Internet Evolution is looking for a handful of readers to help moderate the message boards on our site as well as engaging in high-IQ conversation with the industry mavens on our thinkerNet blogosphere. The job comes with various perks, bags of kudos, and GIANT bragging rights. Interested?