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Salesforce.com Social-Media Tools to Challenge Likes of Jive

Nov. 30 (Bloomberg) -- Salesforce.com Inc. is introducing software that helps customers create online marketing campaigns -- and tightens ties between its social-media tools and flagship software, a development that may spur the company’s own sales.

Salesforce, the largest seller of online customer-management software, is bringing out a product called the Social Marketing Cloud, Senior Vice President Marcel LeBrun said in an interview. The product employs technology acquired in the purchase of Radian6 Technologies Inc.

Customers can send targeted marketing offers to Web users on the basis of conversations on Twitter.com and other social-media sites, LeBrun said. The software further integrates Radian6’s capabilities with those of Salesforce’s Web applications for managing customer relationships, he said.

The San Francisco-based company is competing with Jive Software Inc., Yammer Inc. and Mzinga Inc. to help businesses understand and act on the conversations happening on Twitter, Facebook.com and other websites, said Richard Davis, an analyst at Canaccord Genuity in Boston.

“Salesforce is in the land-grab phase of the market, trying to beat Jive, Yammer and Mzinga to the customer,” Davis said in an e-mail. He has “buy” rating on Salesforce shares.

The stock rose 7.1 percent to $118.42 at the close in New York. Salesforce shares have retreated 10 percent this year.

‘Social Hub’

The Social Marketing Cloud includes “social hub” software that more closely ties Radian6’s technology for monitoring online conversations to other Salesforce products, LeBrun said. A marketing manager at a securities firm could use the software, for example, to target a person who may be a prospective customer because of comments made on a social-media site.

Salesforce Chairman and Chief Executive Officer Marc Benioff plans to discuss the software at the company’s Cloudforce conference in New York today.

Benioff has taken steps to expand Salesforce’s market beyond Web-based software for managing sales and customer service by introducing social-media tools that let employees collaborate on projects. He’s also seeking to help companies and ad agencies tap into the Web users’ online conversations.

In August, Salesforce introduced a higher-priced option for its Winter ‘12 software, which lets sales managers monitor what’s being said on the Web about their company and its products.

Other efforts have been slower to yield returns. Salesforce had to cut the price of the first version of its Chatter software for building corporate social networks to $15 a user monthly from $50.

Model Metrics

Salesforce has been acquiring companies to build its social-media efforts. The company completed its $326 million acquisition of Radian6, where LeBrun was CEO, on May 2. Salesforce said on Nov. 14 it would buy Model Metrics Inc., a social-media consulting company based in Chicago, for an undisclosed price.

“You need consultants who can explain the technology,” said Pat Walravens, an analyst at JMP Securities LLC in San Francisco. “That was a problem for Salesforce.” Walravens has a “market outperform” rating on the shares.

Salesforce will provide the marketing cloud software through annual licenses, LeBrun said. Radian6’s software had yielded monthly rather than annual fees. That stoked analysts’ concerns that some of Salesforce’s acquisitions weren’t adding to its deferred-revenue account, a component of how Wall Street measures sales potential.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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