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Salesforce makes acquisition, but it is not Twitter

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Salesforce makes acquisition, but it is not Twitter

Despite rumours that a bid for Twitter was imminent, Salesforce acquired data management startup Krux for $700 million.  With the acquisition, Salesforce will now be looking to beef up its marketing offerings, an area that is seen as a very lucrative segment by many of its technology peers.

“Krux will extend the Salesforce Marketing Cloud’s audience segmentation and targeting capabilities to power consumer marketing with even more precision, at scale,” wrote Tom Chavez, CEO and Co-founder of Krux, in a blog post on Monday.

Salesforce has dominated the CRM market in recent years but is facing increasing competition as a marketing platform from established names like IBM, Oracle, Adobe, etc. A recent Gartner study, while placing the company as a leader in the marketing cloud segment, pointed out “immature data analytics” as a concern.

The acquisition of Krux, which analyzes internet data and delivers insights for marketers and media planners, will no doubt have been closed with a view to fixing this.  This is Salesforce’s seventh acquisition in 2016 and the second in as many months, even as rival Microsoft managed to trump it for LinkedIn earlier this year.

Is A Twitter Acquisition Still On The Cards?

Twitter has been linked with all and sundry given its, comparatively, lacklustre performance in recent quarters. Salesforce is held by some analysts as a potential bidder but even leaving aside the recent splurges, it remains to be seen whether it can afford the $30 billion asking price that media reports indicate Twitter is holding out for.

Salesforce has been posting impressive revenues with its latest financial statements for Q2’17 showing a 25 per cent increase YoY. In fact, it has already increased its projected FY2017 revenue, which it now says will increase 24-25 per cent YoY. The company has consistently been named as one of the fastest growing tech companies by various analysts, however, it does not have the deep pockets of, say, a Microsoft. If rumours are to be believed, it was ready to spend $26-27 billion (the amount that Microsoft finally paid was $26.2 billion) for LinkedIn. But $30 billion might leave many scratching their heads, if a deal does happen.

On the other hand, Twitter will not only give it access to tonnes of social data on users, it will also give it log-in details of users, which are becoming highly coveted as a means to track users rather than relying on cookies and mobile Ids, which might not always deliver the most accurate information. Facebook uses this. Google, last week, also announced new updates to the way it tracks users across devices, which will lessen reliance on cookies and mobile IDs. In this scenario, the acquisition of Twitter might make sense for the company.

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