Salesforce.com Extends Marketing Cloud With Twitter Powered API

by Trefis Team
-7.96%
Downside
59.78
Market
55.02
Trefis
CRM
Salesforce.com
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Salesforce.com, (NYSE:CRM), which has been building its Marketing Cloud portfolio with acquisitions like Radian6 and Buddy Media, is now offering a new Twitter ad platform for companies using Twitter’s advertising application programming interface (API). This offering is currently in closed beta and Salesforce.com is one of the first social media marketing companies to gain access to Twitter’s API. This platform will allow marketing managers to manage sponsored Tweets on Twitter along with all of their existing social marketing programs.

While social media is a key growth area for Salesforce.com, the company has had weak earnings and reported a net loss of $220 million in Q3 2012, part of which can be attributed to the acquisition of social media company Buddy Media. We expect Marketing Cloud to be a key growth factor for Salesforce.com in the coming quarters. [1]

See our full analysis for Salesforce.com

Outlook And Full Year Guidance

After the strong revenue growth in Q3, the company tweaked its full year revenue outlook higher, around 35%-36% y-o-y growth. It also initiated a FY 2014 guidance of $3.8-$3.85 billion. For Q4, the company expects revenues of $825 million to $830 million, an increase of near 30% y-o-y.

Acquisitions Weigh On Salesforce

Salesforce acquired Buddy Media, a social enterprise software that enables clients to listen, engage, gain insight, publish, advertise and measure social marketing programs. In an 8-K filed by Salesforce , the company revealed that Buddy Media is losing money and in the six months ended June 30, 2012, it reported a cumulative net loss of $20.5 million. This is likely to weigh on Salesforce.com’s earnings in the short term, and we will keep an eye on how its acquisitions are faring.

Owing to these changes in business performance, we currently have a $127 Trefis price estimate for Salesforce.com, which is about 20% lower than the current market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Salesforce.com Launches Twitter Powered Advertising Platfrom, www.cio.com, Feb 20, 2013 []
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