Oracle Gets Social To Drive Cloud Services Sales

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Oracle

Oracle (NASDAQ:ORCL) has acquired two social media companies in the past few weeks, in a bid to gain market share in networking and marketing cloud services. It first acquired Vitrue and then Collective Intellect, both of which are social marketing firms. These companies are likely to be added to its Software as a Service (SaaS) portfolio and the Oracle Cloud. Recently, Salesforce.com (NYSE:CRM), its competitor in cloud-based ERP and CRM software, acquired a social media marketing company called Buddy Media. Social marketing companies enable clients to listen, engage, gain insight, publish, advertise and measure social marketing programs.
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Marketing On Social Media To Drive Sales

Social media solutions help companies and their marketing executives to manage social media campaigns, which have become an important tool in brand-building and awareness. Marketing on social media platforms such as Facebook, Twitter and YouTube is driving technology sales as companies look for tools to deliver and monitor social media campaigns. Social media marketing companies can churn through big data problems and find information for product branding. This technology is likely to be integrated into current Oracle operations to complement its SaaS offerings and cloud solutions.

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There are key differences in the offerings of the two acquired companies, however.

Collective Intellect offers cloud-based applications to help analyze social conversations and turn them into intelligence, marketing campaigns, customer service, and sales leads. Vitrue, on the other hand, provides software and analytics for big Business to Consumer (B2C) businesses to manage media engagements across their social properties on YouTube, Twitter and Facebook.

Oracle paid $339 million for Vitrue while the financial details for Collective Intellect were not disclosed. Revenues from social media services is currently very low for Oracle, but as IT spending grows and marketing budgets begin to include social media software expenditures, we can expect high growth from this division in the future.

We currently have a $39 Trefis price estimate for Oracle, which is ~45% above its current market price.

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