Two Powerhouses Merge: Salesforce Buys Radian6

Social media monitoring giant Radian6 has been acquired by Salesforce.com, a leader in cloud-based customer relationship management, customer service, and enterprise sales management.

Radian6′s technology for capturing brand mentions from data streams, including public user status, pages updates, and wall posts on Facebook, will be integrated into Salesforce as a result of the acquition. Radian6’s unique technology monitors hundreds of millions of conversations every day across Facebook, Twitter, YouTube, blogs and online communities, delivering insights in real-time.

Radian6 will continue to operate independently and customers won’t experience any stoppage of service. The acquisition for $276 million in cash and $50 million in stock will help Salesforce upsell Radian6 clients, who include Microsoft, Comcast, and Pepsi, to packages where brand mentions can be efficiently linked to customer profiles.

Radian6 is used by more than half of the FORTUNE 100 and companies like AAA, Dell, GE, Kodak, Molson Coors, Pepsico, and UPS to monitor, analyze and engage in social media conversations. The acquisition will enhance all Salesforce products, extending the value of the Sales Cloud, Service Cloud (a Facebook monitoring tool), Chatter, and Force.com with enhanced social intelligence, and will add additional utility to the Salesforce Faceconnector app for pulling Facebook data into the platform.

Brands popular with Facebook-savvy users who’ve engaged the site’s privacy controls may be missing a lot of their mentions, but when public Facebook data is combined with monitoring of Twitter, YouTube, blogs and other social media content, it can produce a rough indication of a brand's exposure.

With the growing importance of social media, Salesforce saw the value in acessing Radian6′s data to help its clients identify potential sales targets or brewing customer service problems. Radian6′s Engagement Console, released last year, allows clients to tag specific mentions and assign employees to respond.

With the acquisition, brands looking for monitoring services to improve their marketing will have a one-stop-shop with Salesforce’s cloud hosting, sales, service, and communications products.

Notes Doug Henschen in Information Week, "Salesforce has the social-media-analysis beginnings of what could become a marketing suite. That's not just speculation. Salesforce.com CEO Marc Benioff suggested it's a probable next direction for the company during a conference call on the acquisition. And it's a crucial step for a vendor that wants to be known as 'the enterprise cloud computing company,' not just another SaaS-based CRM vendor."

"Radian6 helped establish the social-media measurement category and has been one of the category's leading lights," says Seth Grimes, an analyst with Alta Plana. Notes Henschen, "Alterian, Attensity, Lithium, Sysomos, and Visible Technologies are among the most direct competitors to Radian6, according to Grimes, but he views broader heavyweights such as IBM, Nielsen and SAP -- vendors that offer both analytics and enterprise software capabilities -- as the competition for Radian6 as part of Salesforce." 

Concludes Henschon: "given recent forays by IT giants into the marketing arena -- with IBM buying Unica, Oracle buying Market2Lead assets, SAS buying AssetLink and Teradata buying Aprimo -- it's easy to imagine Salesforce.com's next step might be to acquire a partner such as Marketo or Eloqua. Both offer the kind of campaign and lead management and automation capabilities that would strengthen Salesforce.com's marketing portfolio." 

PS - Radian6 held a User Conference April 7-8. Here's a report from an attendee.