Oracle Expands Its Social Media Clout By Acquiring Involver

Oracle (NASDAQ:ORCL) is on a feeding frenzy as it buys out social media startup Involver for an undisclosed sum. It has already acquired two social media companies in the past few weeks in a bid to gain market share in networking and marketing cloud services. It acquired Vitrue and Collective Intellect, both in the social marketing space.

We expect these companies to be added to its Software as a Service (SaaS) portfolio and the Oracle Cloud. Salesforce.com (NYSE:CRM), its competitor in cloud-based ERP and CRM software, acquired social media marketing company Buddy Media recently. Social marketing companies enable clients to listen, engage, gain insight, publish, advertise and measure social marketing programs. ^[1]
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Focus on Facebook Campaigns

Involver mainly caters to the creation of campaigns on Facebook. It is a Facebook Marketing Developer and a technology provider for Facebook’s internal marketing team. It pioneered social apps by creating the first social app suite on Facebook and is currently leading the industry with Social Markup Language (SML) and Visual SML. This allows front-end developers to achieve what Involver calls a “pixel-perfect” application and helps marketers customize applications. It also provides an intuitive interface to build the campaign with no requirement for coding.

Strategic Fit for Oracle

Involver has clients such as Toys R’ Us, MTV, Jack Daniel’s, Best Buy and media agencies like Razorfish and Edelman. It is one of the leading social apps campaign managers on Facebook. This fits in well with Vitrue and Collective Intellect.

Vitrue helps manage campaigns across various platforms such as Facebook, Twitter and Google+ while Collective Intellect provides effective campaign monitoring and analytics. Involver is likely to fill in any gaps in the Facebook campaign space and will fit in well with the other companies, consolidating Oracle’s social media service offerings.

Marketing on Social Media to Drive Sales

Technology sales are increasingly being driven by the marketing teams as they look to get marketing campaigns onto social media platforms. Technology spend is no longer restricted to IT budgets and is eating into marketing budgets as well, and this is one of the key reasons why tech giants like Oracle have entered this space.

Social media technology solutions help marketing executives manage campaigns on platforms such as Facebook, Twitter and YouTube. Social media marketing companies can churn through large amounts of social data available and find information relevant for marketing and branding. The key advantage is that these campaigns can be targeted and personalized. This technology is likely to be integrated into Oracle’s current operations to complement its SaaS offerings and cloud solutions.

Revenues from social media services is currently very low for Oracle; however, 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 ~30% above its current market price.

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1. Oracle And Involver, www.oracle.com, July 10, 2012 [↩]