Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Why ExactTarget Inc (ET) Is a Great Fit for, inc. (CRM)

Page 1 of 2

At a premium of slightly more than 50%, it’s not surprising that, inc. (NYSE:CRM)‘s decision to acquire cloud marketing specialist ExactTarget Inc (NYSE:ET) wasn’t greeted with cheers from investors. The aggressive move by Salesforce CEO Marc Benioff to drop $2.5 billion on a company that has issued revenue guidance of just $376 million to $379 million for the year seems a bit much, and based on Salesforce’s share price drop at the open, the market agrees. But don’t be too hasty to abandon Salesforce shares — there may be a method to Benioff’s madness.

ExactTarget Inc (NYSE:ET)Who are these guys?
Prior to the acquisition announcement, ExactTarget Inc (NYSE:ET) was a $1.53 billion cloud-based digital marketing company losing money and eating into its ready cash, even as it consistently grew quarterly revenues. (Not surprising, really, when you consider that when ExactTarget was founded in 2000, the notion of cloud-based marketing solutions didn’t register even as a blip on the radar.)

But setting its lack of positive earnings aside for a moment, ExactTarget Inc (NYSE:ET) isn’t without its successes, most notably its client list. With over 6,000 clients — including folks like The Coca-Cola Company (NYSE:KO), Nike, Inc. (NYSE:NKE), and The Gap Inc. (NYSE:GPS) — automating digital marketing campaigns represent a rapidly growing market that is only going to get bigger. How much bigger? This is where the acquisition gets interesting for, inc. (NYSE:CRM).

According to Yvonne Genovese, a managing VP with Gartner Inc (NYSE:IT), “Marketing was the fastest growing CRM category in 2012, growing at 21% (more than four times the software industry forecast norm in 2012).” Genovese expects marketing “will be the largest growing CRM category through 2017.” In the press release announcing the acquisition of ExactTarget Inc (NYSE:ET), Benioff also alluded to expectations that by 2017, companies’ chief marketing officers will spend more on technology than CIOs.

What it does for Salesforce
For, inc. (NYSE:CRM), the ExactTarget Inc (NYSE:ET) deal is all about providing customers with end-to-end solutions in the exploding cloud digital marketing CRM market. The acquisition provides an immediate inroad into some of the biggest companies in the world, and gives Salesforce additional revenue alternatives with its existing clients.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!