--Deal follows Oracle's buy of Vitrue, Salesforce's deal for Radian6 --Integration to reduce full-year earnings --CEO says he looked into Buddy Media competitors Salesforce.com Inc. (CRM) agreed to acquire marketing platform Buddy Media in a cash-and-stock deal valued at $689 million, broadening the business-software provider's fast-growing social-media footprint. Salesforce Chairman and Chief Executive Marc Benioff said the deal will help the company keep up with demand as the online-marketing business matures. Chief marketing officers are expected to outpace chief information officers in directing technology spending within the next five years, according to a recent report by industry researcher Gartner. Known for its Web-based sales-management software, Salesforce has been turning its focus to selling bundles of social and mobile services. Salesforce has said its social-cloud features are the most direct way for its enterprise customers to become "more social and mobile" to serve their own customers and employees. Salesforce shares, up 26% this year, fell 2.2% to $128.10 Monday morning as the company's revenue projection, based on adding Buddy Media later this year, disappointed investors. The acquisition follows a similar deal revealed last week for marketing toolmaker Vitrue, which Oracle Corp. (ORCL) is buying for an undisclosed sum. Like Buddy Media, Vitrue helps marketers publish and monitor content across platforms like Facebook and Twitter. Mr. Benioff said he "went through every one" of Buddy Media's competitors and chose his acquisition target based on the size of its major customers, the breadth of its products and the strength of its platform. He added that none of the companies the company considered was "doing the kind of large transactions I saw" at Buddy Media. Buddy Media was founded in 2007 to provide chief marketing officers and advertising agencies with a way to place content on social media and measure its effectiveness. The company's current customers include Ford Motor Co. (F), Hewlett-Packard Co. (HPQ) and marketing agencies like Interpublic Group Of Cos. (IPG). Mr. Benioff said Buddy Media will fit with Salesforce's existing offerings, saying the company prefers to integrate newer products with its existing platform to make it easier on customers. "I know that other vendors, because of our success, are trying to stitch it all together by acquiring at the core," Mr. Benioff said. "We're acquiring at the edge." The company last year introduced Chatter, a social-networking feature that now is integrated with its cloud-based suite of sales and business-management software, and earlier this year launched Desk.com, a new service aimed at turning routine customer service into a social engagement that can improve sales. Also last year, Salesforce paid roughly $326 million in cash and stock for Radian6, a maker of tools that also help clients track and analyze their outreach efforts while watching what is being said about their brand. The Buddy Media deal, expected to close during the fiscal third quarter ended Oct. 31, includes $467 million of cash, $184 million of Salesforce stock and $38 million of vested options and restricted stock. The acquisition is expected to boost Salesforce's revenue by $20 million to $25 million during the second half of the fiscal year ended Jan. 31, while reducing adjusted earnings by 14 cents to 15 cents a share for the year. For the full year, the company now sees earnings of $1.45 a share to $1.49 a share on revenue between $2.99 billion and $3.03 billion. Analysts, on average, were expecting per-share earnings of $1.63 on revenue of nearly $3 billion. Write to Drew Fitzgerald at andrew.fitzgerald@dowjones.com
