October 25, 2012
Salesforce Having Growing Pains with Buddy Media and Radian6 Acquisitions
By Tracey E. Schelmetic
Salesforce.com (News - Alert) would appear to have a bit of a social media hangover, largely thanks to two acquisitions that aren’t yet doing the company any favors. The company it purchased this year called Buddy Media (News - Alert), a social media marketing company, it proving particularly troublesome.
Thanks to new filings Salesforce.com has made to the U.S. Securities and Exchange Commission, it has been revealed that Buddy Media finished 2011 with $24.7 million in sales, and ran a net loss of $14.7 million. For the first six months of 2012, Buddy Media earned $18 million in sales and a loss of $20.6 million.
Salesforce.com acquired two social media companies in the last two years: Radian6 in 2010 for $326 million and Buddy Media in the spring of this year for $689 million (it’s rumored that Salesforce.com beat out Google (News - Alert) as a purchaser). The two acquisitions were meant to complement each other and be integrated into operations loosely under the same umbrella.
While it may be a headache , it’s an expected headache, and the numbers are not out of line with what Salesforce.com CEO Marc Benioff (News - Alert) predicted at the time of the acquisition, according to All Things D. The deal is not about immediate returns, but more about the future.
The losses in the case of Radian6 would appear to be leading to layoffs. Salesforce.com is reported to be laying off “less than 100 people” from that subsidiary.
A company spokesperson said, “With the integration of Radian6 and Buddy Media, the Salesforce Marketing Cloud is re-balancing its resources to support its growth, including moving from a hub to a distributed model for certain customer-facing roles, consolidating marketing and dramatically increasing investments in R&D. Fewer than 100 people were impacted globally.”
Edited by Brooke Neuman