SFSF Successfactors, Inc. (MM)

For Immediate Release

Chicago, IL – February 13, 2012 – 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 Inc. (ORCL), Taleo Corp. (TLEO), SAP AG (SAP), SuccessFactors Inc. (SFSF) and Salesforce.com Inc. (CRM).

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’s $1.9B Deal to Buy Taleo

Oracle Inc. (ORCL) agreed to buy Taleo Corp. (TLEO), a SaaS human resource software provider, for $1.9 billion or $46 per share.

Following this announcement, shares of Taleo were up nearly 17%, closing at $45.64, yesterday. Taleo has a clientele that spreads across 5000 organizations. Taleo’s Talent Management Cloud helps organizations to enhance human resource capabilities, improve performance and drive growth.

We believe that this acquisition is further evidence of Oracle’s continued focus on its cloud computing infrastructure. The acquisition is expected to expand Oracle's public cloud offering. The public cloud, which originally comprised existing products including fusion applications, expanded the company’s penetration into the SaaS application space.

Earlier, Oracle had locked horns with SAP AG (SAP) for acquiring California-based cloud-computing software company SuccessFactors Inc. (SFSF), a developer of software used by firms to evaluate employee performance. However, after losing out to SAP, Oracle was on the lookout for a similar buying opportunity in the SaaS space.

The Cloud Might Float Higher

SaaS has gained immense importance due to the increasing adoption of cloud computing. According to market research firm Gartner, sales of online software, which touched $10 billion in 2010, is expected to more than double to $21.3 billion in 2015, much faster than traditional software.

Moreover, according to research firm Forrester, cloud computing revenue is expected to increase from approximately $41.0 billion in 2011 to $241.0 billion in 2020. Meanwhile, Gartner projects revenue of $148.8 billion by 2014, higher than Forrester’s forecast of $118.7 billion for the same period.

In October 2011, Oracle acquired RightNow Technologies Inc, a premier Software-as-a-Service (SaaS) provider and a rival of SAP for $1.43 billion. The addition of RightNow also helped Oracle to target Salesforce.com Inc.’s (CRM) service cloud offering, taking the competition between the two to the next level.

Our Take

Oracle remains very active on the acquisition front and generally targets companies that can be integrated within its existing or new product lines. From time to time, the company also acquires organizations with competing technologies with the intention of eliminating rival products. We believe that acquisitions in the field of data management and cloud computing will be beneficial for Oracle over the long term.

However, Oracle faces significant integration risks due to the rapid pace of acquisitions within a short span of time, in our view. We also note that Oracle is a late entrant in the field of cloud computing compared to peers like Salesforce.com. Hence, it might face tough competition. Moreover, diminishing margins from its new software licenses and sluggish hardware sales are near-term headwinds.

We remain Neutral on a long term basis (6-12 months). Currently, Oracle has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

 
SALESFORCE.COM (CRM): Free Stock Analysis Report
 
ORACLE CORP (ORCL): Free Stock Analysis Report
 
SAP AG ADR (SAP): Free Stock Analysis Report
 
SUCCESSFACTORS (SFSF): Free Stock Analysis Report
 
TALEO CORP-A (TLEO): Free Stock Analysis Report
 
To read this article on Zacks.com click here.