Salesforce spends $326M on social marketing

In acquisition of Radian6, cloud giant finds a new source of revenue and an avenue to social media

Financial trends and news by Ronny Kerr
March 30, 2011
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Hear that? It’s the sound of a million social marketing startups perking up their ears.

Cloud computing company Salesforce announced Wednesday it has agreed to acquire Radian6, a Canada-based social media monitoring platform, for approximately $276 million in cash and $50 million in stock, net of cash acquired. The deal, which Salesforce expects to be completed in the company’s fiscal second quarter ending in July, could earn Radian6’s founders an additional $14 million, dependent on certain conditions.

The benefit for Salesforce is nearly unquantifiable. That said, the cloud company expects its second quarter revenue to increase by about $5 million and revenue for the whole year to increase by about $45 to $50 million. In terms of engagement and content, everyone had more than a hunch that social media marketing would prove to be a gold mine, but these numbers give a clear picture of exactly what any one company might be worth, at least in the early stages.

“Social media has made every business recognize the value of paying attention to the voice of the customer. Radian6’s technology is built for the new norm of customer engagement - real time, two way conversations that includes social channels,” said Marcel LeBrun, CEO of Radian6. “Joining the team will allow Radian6 to grow faster to meet the demands of our rapidly expanding customer base.”

As with other recent Salesforce acquisitions, like social productivity suite Manymoon, Radian6 will continue to operate as it has, with its new parent company lending support and funding to evolve the service. Additionally, Salesforce will eventually integrate the startup’s technology into its platform.

Radian6 was founded in 2006 by Chris Newton and Chris Ramsey and is today led by a relatively unknown but well-experienced executive team. Though headquartered in New Brunswick, Canada, the company has over 300 employees working at a handful of offices from New York to Orange County.

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