Salesforce acquires Radian6 for $326 Million Dollars

Acquisition rumors have been going around since last Spring Radian6 was going to be acquired and now Radian6 has been acquired by Salesforce.com in a largely cash deal with $326 Million dollars – $276 million cash and $50 million stock,  as of today, March 30th, 2011.

The acquisition will enhance all Salesforce.com products including Salesforce.com products including Sales Cloud, Service Cloud, Chatter and Force.com.

SAN FRANCISCO, March 30, 2011 /PRNewswire/ — Salesforce.com (NYSE: CRM), the enterprise cloud computing (http://www.salesforce.com/cloudcomputing/) company, today announced it has entered into a definitive agreement to acquire Radian6, the industry-leading social media monitoring platform, for approximately $276 million in cash and $50 million in stock, net of cash acquired. The transaction is expected to be completed in salesforce.com’s fiscal second quarter ending July 31, 2011, subject to customary closing conditions.

Let’s talk about this.   Suitors for Radian6 have been suggested over the last year including Google, Cision, Adobe, New York Times (or any large publishing outlet);  while it makes perfect sense that Salesforce would acquire Radian6, I don’t think it was on anyone’s top of mind, since Radian6 does many partnership deals you could have just as easily supposed Adobe (for Omniture) or WebTrends could have wanted to integrate Radian6 than Salesforce.com.

… But the cards didn’t get dealt that way – and Salesforce already has an integration with Radian6 for over two years, as did WebTrends and more recently Adobe Omniture and Google Analytics …..  so there were many possibilities – but also t that data is a commodity and it’s what you do with the data that is important (you can buy much of the data Radian6 provides from Aggregators and or/ Alterian / BrandWatch / at el).

What this acquisition of Radian6 by Salesforce.com really means is the next phase of Social Media Analytics has now taken place … that the Social Data is now going Quant … it’s going into massive databases where it can be cut and diced and segmented…. into data cubes, much as I postulated last fall in my Compete.com white paper on Spectrum Analytics – Tracking Social Media ROI using Spectrum Analytics.

I think the acquisition of Radian6 by Salesforce.com   signals  Paul Holmes was right on when he said after our debate in Davos last month that… (well .. read Holmes post)

My book about Social Media Analytics is all about that …. but instead of two or three years from now … I’d put the integration into next year; the needs of customers are becoming much more diagnostic and Return on Investment focused – and while the platforms have been improving – the skill to use those capabilities well, hasn’t.

Most companies still don’t understand what to do with Radian6 or the other  platforms / tools they use for listening as there are  vast repositories of data via Web services / APIs with many big pipes that are growing day by day.

Just because there’s available data (aka. Radian6/Salesforce.com) – doesn’t necessarily mean that you’ve got the right Org Chart and Corporate Culture to leverage it; most companies don’t – that’s the real issue and why Holmes thinks companies ( Paul Holmes focuses on PR) require  Chief Analytics Officers – because you not can treat platform decisions to be made well, otherwise.

And as Marshall McLuhan said 47 years ago – The Medium is The Message.  The Wrong applications of the medium alter the message to the point it can not be communicated properly … and that’s what’s happening in so many places that I can’t count them all – people are still trying to grapple with Twitter and Facebook 101  – where they really need to go is QUANT … where Radian6 is going with Salesforce.com … but that takes another type of individual to worth with data … someone who is more a blend of computer science with the arts …  creative with the data, but honest with it as well.   These changes will also impact timelines and deliverables – where precision will be needed

Among other things the acquisition of Radian6 by Salesforce will

  • Shake up the Social Listening industry … just last month Brandtology was acquired, and over the last 24 months Scout Labs, Biz360, Techrigy, et all.   There will be few independents left – clearly the time to sell is now ….  it will be difficult to compete with the research and marketing dollars that bigger companies can offer unless the platform has some niche needs it fulfills – and if it is that good, it will eventually be acquired anyway.
  • Speed up the development of this field by bringing CRM to the forefront.
  • Establish a higher price point for services around social listening.
When I was in Europe last month I had an interesting conversation with a former money fund manager who knows this Listening Space well.   He said ……  the “smart money” would not invest in Social Media Listening platforms because they fail to deliver intelligence (quoting me – ha!).
I replied .. you don’t know that ….. who can say what will happen next ….. maybe the ecosystem for valuations are being created right now.
Well .. they have.  With Salesforce.com buying Radian6 for $326 million you have to believe most of the platforms that sold up to now regret not asking for more.  And …… smart money is on this deal … very smart money.
So I expect a lot to change.  And, by the way, I’ll be at Radian6 (SalesForce.com) user conference next week in Boston, speaking on Social Media ROI, so any announcements made there I’ll get first hand – and in fact, this announcement today I was told, first hand by a few at Radian6 who want to announce it to the world.
Well done …. and might I say .. a better suitor for Radian6 you could not find …. Radian6, I’m sure will also improve as a result of this acquisition.

dd

One thought on “Salesforce acquires Radian6 for $326 Million Dollars”

  1. Well written Marshall. The point “the “smart money” would not invest in Social Media Listening platforms because they fail to deliver intelligence” is one I agree with — strongly.

    Listening platforms are not enough. There are too many voices to listen to and growing larger each day. Listening platforms take ginormous sets of data, and create enormous set of results. That does not scale. And from our conversations with marketing professionals around the globe, it’s becoming a real problem.

    As you know, we built mPACT to add a layer of intelligence on top of listening – to help users figure out who the most important voices are across social networks, blogs and online media. I believe that is where the market is headed – in fact already there.

    Well done Radian6.

    Gary Lee
    CEO, mBLAST
    http://www.mblast.com/mpact
    Use mPACT to find, listen to, and measure the voices impacting your market.

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