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 salesforce.com, inc. (CRM)

At a premium of slightly more than 50%, it’s not surprising that salesforce.com, 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 salesforce.com, 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 salesforce.com, 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.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...