Salesforce Buys Business Directory Jigsaw For $142 Million In Cash Plus Earn-Out
Salesforce.com has just announced that it has entered into a definitive agreement to acquire Jigsaw, which provides crowd-sourced data services in the cloud, for approximately $142 million in cash …
Context & Ripple Effects
Jigsaw built its business-contact directory by paying contributors $1 per uploaded contact — a model that drew criticism back in 2006 and led an analyst to ask, in December 2009, whether the once-condemned data practice was still problematic given how the industry had changed. Salesforce's answer is to acquire the entire operation for roughly $142 million in cash plus an earn-out, folding a crowd-sourced data service into a public company's portfolio.
The purchase fits Salesforce's established posture of extending the platform beyond its own walls: in November 2008 it announced plans to make its cloud work with Facebook's and Amazon's clouds, and Jigsaw's crowd-sourced contact data slots directly into that same platform ambition — the CRM vendor now owns the raw material its customers sell against, not just the tooling.
First-order effects
- Salesforce gains direct control of Jigsaw's contact marketplace, meaning its CRM customers can source leads from an owned, integrated database rather than a third-party service.
- Jigsaw's contributors and contact purchasers now operate under a far larger acquirer whose brand invites more scrutiny of the pay-per-upload model than Jigsaw ever faced alone.
Second-order effects
- Rival CRM vendors face pressure to bundle verified business-contact data with their applications, since Salesforce can now price the combination against standalone software.
- The deal hands fresh ammunition to the privacy debate an analyst raised in late 2009: monetizing individuals' contact details through paid uploads is now an enterprise-scale practice with a marquee name attached.
Third-order effects
- If the pattern holds, CRM competition shifts from workflow features toward ownership of proprietary data layers — the contact graph becomes the durable asset the applications sit on top of.
- Crowd-sourced personal data assembled through cash incentives becomes a normalized corporate asset class, which points toward eventual regulatory and standards attention on how such databases are sourced and consented.
The trend: Enterprise SaaS vendors are acquiring their way down the stack, buying the proprietary data assets that feed their applications rather than building the datasets themselves.