Done deal: Salesforce.com buys Buddy Media for $689m in cash and shares
Salesforce.com has finally confirmed that it has acquired social media marketing company Buddy Media for nearly $700 million in cash and shares ($689 million to be exact). — Early rumors about the purchase …
Context & Ripple Effects
The deal closes a week-long arc: AllThingsD reported on May 29 that Salesforce was set to snap up Buddy Media at a price north of $800 million, and today's confirmation lands below that figure — $689 million in cash and shares. That gap between the rumored and final number is the first thing deal-watchers will parse.
The pickup's breadth signals how closely the deal was watched: Reuters, DealBook, AllThingsD, Inside Facebook and Computerworld all carried the confirmation on day one, reflecting Buddy Media's standing as one of Facebook's marquee marketing partners and Salesforce's appetite for acquisitions beyond its core CRM — a pattern already established with the roughly $212 million Heroku buy in December 2010.
First-order effects
- Salesforce gains a proven social-publishing and management platform overnight, letting it attach social media capabilities to its existing CRM and Radian6-based listening stack rather than building them in-house.
- Buddy Media trades independence for Salesforce distribution: its brand clients and Facebook-centric tools are now folded into a public company's portfolio, ending its run as one of the largest independent social marketing shops.
Second-order effects
- Rival enterprise suites — Oracle, SAP, Adobe among them — face pressure to answer with their own social-marketing purchases rather than partnerships, since Salesforce has shown it will pay eight figures-plus to close capability gaps by acquisition.
- Independent social media management vendors see their exit window validated and their negotiating leverage shift: with a strategic buyer paying this level, standalone valuations reset upward while remaining independents become scarcer targets.
Third-order effects
- If the pattern holds, social media management stops being a standalone category and becomes a feature line inside consolidated 'marketing clouds,' with enterprise software buyers choosing suites over best-of-breed point tools.
- Facebook's partner ecosystem thins as its biggest marketing vendors are absorbed by larger platforms, concentrating who mediates between brands and the social graph.
The trend: Enterprise SaaS vendors are assembling full-service marketing clouds through acquisition, absorbing standalone social media tools into CRM suites before those tools grow into competitors.