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Salesforce Buys ExactTarget for $2.5 Billion

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Re: Salesforce Buys ExactTarget for $2.5 Billion

#11

Post by endlessvoid94 »

jeremymcanally wrote: post #2

I would comment on this, but DHH has captured my thoughts nearly exactly on Twitter today: http://twitter.com/dhh This is insane. $2.5b for a company that has lost money through its existence, has a very small set of (likely not-so-diverse) clients (6,000ish), and makes 10% of what they paid for them in revenue ? Strikes me as a crazy purchase, but perhaps there's something else afoot that I don't see. I've been prov…

It says they ran a $21MM loss on almost $300MM in revenue last year. Their growth rate combined with the LTV of their customers is probably very promising.

Reminds me a lot of Palantir.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#12

Post by brown9-2 »

jeremymcanally wrote: post #2

I would comment on this, but DHH has captured my thoughts nearly exactly on Twitter today: http://twitter.com/dhh This is insane. $2.5b for a company that has lost money through its existence, has a very small set of (likely not-so-diverse) clients (6,000ish), and makes 10% of what they paid for them in revenue ? Strikes me as a crazy purchase, but perhaps there's something else afoot that I don't see. I've been prov…

The best part is that this is literally the last full sentence of the article:

It ran a $21 million loss on $292 million in revenue last year.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#13

Post by dubcanada »

tommccabe wrote: post #6

I use Exact Target, every day, and I'm very happy with their product and their service. I won't speak to the valuation, but their technology and application is great.

I don't know if I would call it "great" it is pretty awesome. But it's also slow as you can possibly be. There are times it's unusable due to the slowness.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#14

Post by sudonim »

We're the little guy competing against ExactTarget. I had no idea their business wasn't profitable. From their customers who have reached out to me, it seems that for web businesses to integrate with them there are huge complexities (like mirroring your production database, and having ET engineers write custom code for you).

Even with all this they've clearly been successful on the revenue front. With an acquisition like this (company losing money), it'll be interesting to see what SalesForce does to make them turn a profit.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#17

Post by jhull »

jeremymcanally wrote: post #2

I would comment on this, but DHH has captured my thoughts nearly exactly on Twitter today: http://twitter.com/dhh This is insane. $2.5b for a company that has lost money through its existence, has a very small set of (likely not-so-diverse) clients (6,000ish), and makes 10% of what they paid for them in revenue ? Strikes me as a crazy purchase, but perhaps there's something else afoot that I don't see. I've been prov…

Buying ExactTarget adds 6000 more prospects/customers that Salesforce can sell to. Assuming that it signs up a fraction of those to use Salesforce Service Cloud or Data.com or any of the other Salesforce products, that's more money and helps justify the price.

Oracle has been doing this for years (and probably where Benioff got his playbook) They buy up a company, fold in their customers and cross-sell their other products to them.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#18

Post by the_watcher »

tommccabe wrote: post #6

I use Exact Target, every day, and I'm very happy with their product and their service. I won't speak to the valuation, but their technology and application is great.

You would call their technology and application great? I use it every day as well, and for me it's one of the worst pieces of enterprise software I have to use. Unusably slow, and what should be very simple makes me jump through multiple hoops.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#19

Post by finnh »

mrjaeger wrote: post #5

"Salesforce is paying $33.75 a share, which amounts to an 11.7 percent premium over yesterday’s closing price of $22.10. Salesforce shares are down by more than 2 percent, or $40.16, in pre-market trading on the news." How does any of that math make sense? Since when does 2% of $22.10 amount to $40.16, or is my brain just not working so early in the morning?

Looks more like a 50% premium to me.

Re: Salesforce Buys ExactTarget for $2.5 Billion

#20

Post by jeremymcanally »

jhull wrote: post #17
jeremymcanally wrote: post #2

I would comment on this, but DHH has captured my thoughts nearly exactly on Twitter today: http://twitter.com/dhh This is insane. $2.5b for a company that has lost money through its existence, has a very small set of (likely not-so-diverse) clients (6,000ish), and makes 10% of what they paid for them in revenue ? Strikes me as a crazy purchase, but perhaps there's something else afoot that I don't see. I've been prov…

Buying ExactTarget adds 6000 more prospects/customers that Salesforce can sell to. Assuming that it signs up a fraction of those to use Salesforce Service Cloud or Data.com or any of the other Salesforce products, that's more money and helps justify the price. Oracle has been doing this for years (and probably where Benioff got his playbook) They buy up a company, fold in their customers and cross-sell their other pr…

Yeah but assuming that works out as profitable, those customers (assuming they all stay with them) would have to start spending 10x the money they're spending with ExactTarget now on Salesforce products. That's a big stretch and risk, but again, maybe it'll work out for them. :)
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