March 30, 2011 / 3:32 PM / in 7 years

Salesforce.com seeks social media edge with Radian6 buy

BANGALORE (Reuters) - Salesforce.com’s $326 million purchase of privately held Radian6 will allow the cloud-based software maker help its clients track customer trends on social media sites such as Facebook and Twitter.

Salesforce.com has been jostling with rivals such as IBM and Dell Inc to differentiate itself in the highly competitive cloud computing market, by picking up small companies with promising technologies.

In December, Salesforce.com, the world’s biggest provider of software delivered via the Web bought Heroku, another cloud-platform company, for $212 million.

Radian6 is its third buy this year, after web-conferencing service Dimdim and ManyMoon, which makes productivity and collaboration tools to Web apps.

Last year, IBM bought privately held Cast Iron Systems and Dell Inc picked up Boomi to boost their cloud offerings.

Radian6’s products will allow Salesforce.com integrate feeds from sites such as Facebook, which boasts more than 500 million users, into its own social media offering for companies -- Chatter -- launched last year.

“We really believe the explosive growth of social media is just beginning and the ability to bring that deeply into our application and platform will be a critical next step,” Chief Executive Marc Benioff said on a conference call.

Radian6, based in Fredericton, New Brunswick, Canada, was founded in 2006 and had over 120 employees as of June last, according to the firm’s website. It counts Dell, Kodak, PepsiCo, and UPS among its customers.

“The acquisition fits in very nicely with their strategy to go ahead in social media,” Gleacher and Company analyst Brad Whitt told Reuters.

Salesforce.com, with a market value of $17 billion, expects the deal to add about $45-$50 million in revenue for the full year but sees a fall in adjusted earnings of 11 cents per share.

The company now expects full-year earnings of about $1.24-$1.27 per share, on revenue of $2.08-$2.1 billion.

Shares of the company were rose about 2 percent to $129.56 in early trade on the New York Stock Exchange. (Reporting by Siddharth Cavale and Supantha Mukherjee; Editing by Saumyadeb Chakrabarty, Unnikrishnan Nair)

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