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The Zacks Analyst Blog Highlights:Oracle, Eloqua, Automatic Data Processing, Salesforce.com and IBM



 The Zacks Analyst Blog Highlights:Oracle, Eloqua, Automatic Data Processing,
                            Salesforce.com and IBM

PR Newswire

CHICAGO, Dec. 24, 2012

CHICAGO, Dec. 24, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Oracle Corp. (Nasdaq:ORCL),
Eloqua Inc. (Nasdaq:ELOQ), Automatic Data Processing Inc. (Nasdaq:ADP),
Salesforce.com Inc. (NYSE:CRM) and IBM (NYSE:IBM).

(Logo:  http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit
from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday's Analyst Blog:

Oracle Expands Cloud, Buys Eloqua

Oracle Corp. (Nasdaq:ORCL) is aggressively building its position in the
cloud-computing arena through strategic acquisitions. After acquiring
cloud-based service providers RightNow Technologies in January and Taleo Corp
in April this year, Oracle recently announced the acquisition of Eloqua Inc.
(Nasdaq:ELOQ) for approximately $871.0 million.

Virginia-based Eloqua develops cloud-based automated marketing solutions.
Eloqua software helps businesses monitor marketing and sales initiatives. Its
tools are also used by marketing departments to analyze online behavior and
buying preferences in order to find prospective customers.

According to Reuters, Eloqua has a strong customer base, which comprises
Automatic Data Processing Inc. (Nasdaq:ADP), AON Plc, Dow Jones, Polycom Inc.
and National Instruments Corp. The company also has an online sales
partnership with Salesforce.com Inc. (NYSE:CRM), one of the major competitors
of Oracle in the automated marketing software market. Eloqua earned revenue of
$23.8 million in the recently concluded third quarter of 2012.

In August 2012, Eloqua completed its initial public offering ("IPO") that
generated net proceeds of approximately $87.7 million. Oracle's offer price of
$23.50 per share is double that of Eloqua's IPO price of $11.50 per share and
represents a 31% premium to its December 19 closing price of $17.92. Following
the announcement, Eloqua share price surged 32.0% to close at $23.66 on
December 20, 2012.

According to data from Bloomberg, Oracle's offer price equates to more than 9
times Eloqua's trailing 12 months sales, a premium compared to 6.3 times for
RightNow and 7.1 times for Taleo. As Oracle is comparatively a late entrant in
the cloud-computing market, we believe that the company is paying a premium to
boost its product portfolio in order to catch up with Salesforce and IBM
(NYSE:IBM).

According to market research firm Gartner, marketing is one of the four
fastest growing areas of enterprise sales applications on the SaaS
(software-as-a-service) platform. Gartner projects a robust increase in
marketing spending due to improving e-commerce sales, higher adoption of
social networks, rapid usage of mobile devices and improving marketing
effectiveness.

We believe that higher spending on marketing bodes well for Oracle, as strong
demand for Eloqua's revenue performance management application will boost its
top-line. Oracle intends to integrate Eloqua into its Oracle Marketing Cloud
and it will be an important addition to Oracle's customer experience
portfolio.

We expect Oracle to continue pursuing strategic acquisitions of technology
start-ups that can be easily synchronized with its product lines. These
acquisitions will help Oracle to expand its customer base over the long term.
The strategic acquisitions will also help Oracle to reduce competition by
eliminating rival products going forward.

However, we believe that competition remains stiff for Oracle, which will
limit its growth abilities going forward. Oracle's hardware business continues
to decline, putting massive pressure on the software side to perform
consistently in order drive to growth. In such a scenario, cut-throat
competition and sluggish IT spending will hurt profitability going forward.

We remain Neutral on a long-term basis. Currently, Oracle has a Zacks #3 Rank
(Hold).

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