Peter Kafka

Recent Posts by Peter Kafka

Why Google Couldn’t Pal Up With Buddy Media

Marc Benioff is a big, intimidating dude who is also a billionaire. He runs a company that did more than $2 billion in sales last year. But compared to Larry Page, he’s a piker.

So how did Benioff end up with Buddy Media this week, when Google was also bidding for the social marketing company?

In part because he showed up. And in part because he runs, not Google.

That’s the story I’ve been able to piece to together in the last few days, by talking to people familiar with the Buddy Media/Salesforce deal.

I don’t have all the details. For instance, several people I’ve talked to have suggested that Google offered more than the $745 million-plus that Buddy ended up selling for, but I don’t know the exact amount. And different people tell me different things about just how far Google went in the bidding process — a couple have told me that Google made formal offers, while others say there was always uncertainty about the deal points.

But I do have a pretty good sense of why Buddy took Benioff’s offer.

In short, Buddy Media CEO Mike Lazerow and his board sold to Salesforce because they were more confident that Salesforce could actually close the deal and get money into their bank accounts.

Benioff, for instance, negotiated with Lazerow and his team directly, unlike Google, which used lower-level employees to haggle, directed by Google sales boss Nikesh Arora. And Buddy knew that Google now faces federal scrutiny on any major M&A deal, and that the scrutiny is likely to be even more intense when it comes to advertising deals.

Last June, for instance, Google announced plans to buy ad tech start-up AdMeld for $400 million, but didn’t get federal approval until December of that year. Salesforce, meanwhile, says it should have the Buddy Media deal closed in October.

There was also the question of exactly what would happen to Buddy Media if Google actually did buy it. After all, while Lazerow has taken pains to expand the company’s business beyond Facebook marketing, Facebook remains its most important platform. So how would Sheryl Sandberg and company react when one of their two main rivals got into the Facebook marketing plans?

We may still find out. If Google was willing to spend close to a billion dollars on Buddy Media, it is presumably willing to buy a different social marketing company. And there are a whole lot of them out there (with increasingly big bank accounts) to choose from. But if Google ends up back at the social marketing negotiating table, it may need to try some different tactics.

Latest Video

View all videos »

Search »

When AllThingsD began, we told readers we were aiming to present a fusion of new-media timeliness and energy with old-media standards for quality and ethics. And we hope you agree that we’ve done that.

— Kara Swisher and Walt Mossberg, in their farewell D post