Salesforce buys Buddy Media for $689M

Salesforce now has ownership of two big listening companies: Radian6 & Buddy Media

Enterprise cloud computing titan Salesforce confirmed Monday morning that it has agreed to purchase New York City-based Buddy Media for $689 million.

Word slipped out on Tuesday last week that such a grab was very likely. Buddy Media creates social media analytics for brands. This new purchase, in combination with Salesforce’s Radian6, could help companies keep very detailed records of every campaign, comment and engagement point online to find likely sales leads and places of improvement. Salesforce will buy the company for $467 million in cash, $184 million in common stock, and $38 million in vested options and restricted stock units.

Salesforce says the deal has been approved by Buddy Media’s board and is expected to close by fiscal Q3 2013: October 31, 2012. The company expects the deal to add an additional $20 million to $25 million in revenues for the fiscal year 2013.

The news comes just weeks after enterprise services rival Oracle announced it would buy another social media marketing player, Virtue, for $300 million. It seems everyone wants their own social media marketing company nowadays.  Oracle is also expected to announce a new enterprise cloud computing strategy this week -- so prepare for even more social media strategy speak. 

Buddy Media was founded in 2007 by CEO Michael Lazerow and COO Kass Lazerow. Since then it has raised nearly $90 million, including a $23 million round C in October 2011 from Institutional Venture Partners, Greycroft, and Bay Partners, and a $54 million round D in August 2011 from Insight Venture Partners, along with existing investors. During that fundraising round, Buddy Media was valued at $500 million.

Buddy Media currently helps maintain advertising, ads and pages on social networks. While it is best known for its work with ad-targeting for Facebook, Buddy Media also utilizes Twitter, LinkedIn and Google+.

“Salesforce.com now has the number one players in social listening and marketing – Radian6 and Buddy Media,” said Marc Benioff, chairman and CEO, salesforce.com. “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.”

Earlier this year, Buddy Media acquired Facebook ads API partner Brighter Option, after purchasing social commerce and analytics startup Spinback in May 2011.

With 8 of the top 10 advertisers as clients, Buddy Media is the clear leader in social media marketing. The company currently has nearly 1,000 customers, including major global brands like Ford, Hewlett Packard, L’Oreal, Mattel and the world’s largest marketing agency groups such as IPG (Interpublic Group), Omnicom, Publicis and WPP. Buddy Media is the only company to be named a charter Facebook Preferred Marketing Developer, Google Engagement Solutions partner and LinkedIn Certified Developer.

Salesforce currently has 100,000 customers, and had net income of over $64 million in 2011, out of over $1.6 billion in revenue.