AllThingsD is reporting that social marketing company Buddy Media is in talks to be acquired by Salesforce for $800 million. We had been hearing similar rumors ourselves, and reached out to Buddy Media last week, but the company refused to confirm, saying only, “We’ve been hearing this kind of chatter since the day we started the company, and it has always turned out to be false.”
An acquisition for Buddy makes sense–Facebook’s bungled IPO (its stock dropped another 10 percent today) left little room for companies with offerings reliant upon Facebook to go public themselves. And judging from Buddy’s hiring of an “IPO-ready CFO” last August, an IPO was its preferred route.
There’s also the fact that social marketing’s current manifestation is inherently unsustainable. Sooner or later, big brands are going to figure out how to manage their own Facebook pages in-house, and refuse to pay the high premiums offered by companies like Buddy. Plus, startups like One Public offer similar services, but for free.
“We had been hearing about Buddy Media’s acquisition by Salesforce last year as well, but I think their primary objective must have been to go Public,” Fahad Khan, CEO of One Public, Inc., told us via email from the D Conference. “However, post-Facebook IPO, many IPO dreams have been shattered. Buddy’s sale is one of those shattered dreams.”
Mr. Khan added that Buddy’s possible acquisition by Salesforce “is nothing but good news for smaller players like us as it will level the playing field. Two other big players (Context Optional and Vitrue) have been acquired already….these players will be busy integrating their products with acquirers while smaller players can focus on serving the ever moving target of satisfying global brands and their agencies.”
Sources told AllThingsD that “the two companies have agreed to terms that will value Buddy Media at more than $800 million, but that the transaction hasn’t closed yet. People familiar with the deal say Buddy Media chose Salesforce’s offer over a competitive bid from Google.”
The acquisition would make Buddy one of the last big social marketing companies to be acquired, and the largest one to date. This reporter’s former employer, Context Optional, was picked up by Efficient Frontier last fall, and Efficient Frontier was nabbed by Adobe earlier this year; Oracle bought Facebook marketing platform Vitrue for $300 million just last week.
Salesforce itself bought social media monitoring tool Radian6 last year, so an acquisition of Buddy–a much more robust social marketing platform–is a smart move by Salesforce to, as AllThingsD reports, “extend its core customer relationship management offering.”
“The acquisition is all about data,” confided one industry insider. “That’s why companies like Adobe and Oracle and Salesforce are gobbling up social media marketing companies–there’s data out there to be integrated into the larger story.”
Of the potential Radian6 and Buddy Media pairing, our source added, “That marriage will probably be pretty interesting.”
Buddy Media declined to comment “on rumors and speculation.”