Benioff Calls ExactTarget the Perfect Fit for Salesforce (Video)
Shareholders of Salesforce.com voted with their trades today in reaction to the company’s $2.5 billion acquisition of email and digital marketing player ExactTarget. Salesforce shares fell by nearly eight percent, or $3.24, to $37.80, and the shares are now off their 52-week high by nearly 37 percent.
Never mind that. CEO Marc Benioff, in what appears to be his sole media interview on the deal, went on his favorite TV show, CNBC’s “Mad Money,” less than an hour ago and defended the deal, calling Indianapolis-based ExactTarget a “perfect fit” with Salesforce that, he argues, completes its cloud-based marketing software business. And by the way, Salesforce raised its annual guidance to say it expects to report $4 billion in revenue this year.
One other thing he said is that Salesforce looked at “every company” in the marketing software space. The one not named ExactTarget that appeared to take the biggest hit today was Marketo, which floated an initial public offering last month. Its shares fell by $1.97, or eight percent, to $22.61 and are off their highest levels by more than 15 percent. Marketo, itself a cloud-based marketing and “Revenue Performance Management” company, had many times been named as a possible, even likely, Salesforce target.
Indeed, at least part of any investment analysis of Marketo included a possible buyout by Salesforce, and Salesforce has been known to be shopping around for some time following Oracle’s $871 million acquisition of Eloqua last year.
Salesforce has at times been criticized for overpaying on its acquisitions. The $212 million it paid for Heroku at a time when it was basically a pre-revenue startup was a good example. In 2011 it paid $326 million for Canada’s Radian6, the first big piece of what ultimately became the “marketing cloud,” and it wasn’t long before that looked like a pretty solid idea. Buddy Media came next and was, at $745 million, Salesforce’s biggest acquisition before today.
What are the results so far? Benioff said on a conference call with analysts on May 23 that he expected the marketing cloud could be a $1 billion business. So how’s that working out? Right now, he said, it’s a $100 million business.
But as he says in the video with CNBC’s Jim Cramer below, there’s hope. Tech spending by marketing execs is expected to eclipse that of CIOs and CTOs within four years. That’s what Salesforce is gunning for with this deal and others before. And ExactTarget’s strengths in email and digital marketing fill out gaps in Salesforce’s capabilities. Also, as he tells Cramer, ExactTarget hasn’t grown that much internationally, something it can do as part of Salesforce. All of this makes it the “perfect fit” for Salesforce, right? At $2.5 billion, it better be.
Here’s the video.