This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Megavendors Stalk Digital Marketing Tech Providers

"What interests the megavendors are those marketing companies that have a base of large clients," he said.

Marketo has made more success with small to mid-sized companies than with larger entities.

Stephens analyst Carter Malloy said that both Marketo and Responsys could be targets. He doesn't follow privately held Silverpop.

"It's the value of the technology and scarcity of assets of this type of quality," he said.

Malloy notes that Responsys, trading at about 3 times revenues, scored higher in a recent Gartner (IT) ranking than ExactTarget, Eloqua, Marketo or Neolane, which were acquired at or trade at 6 to 9 times sales. Marketo is at the higher range of the scale.

Before Salesforce acquired ExactTarget, some industry watchers speculated that Marketo might be the target. Responsys CEO Dan Springer suggested at a Stephens investor conference in July that could have been deterred by Merkato's price expectations.

"Many people thought, and I definitely considered this, that they would buy Marketo, who was the next largest B2B centric player in the space who has recently went public," Springer said.

Salesforce may have felt squeezed after its $689 million purchase of Buddy Media in 2012.

"They paid so much money when they purchased Buddy Media for a relatively small amount of revenue, to go out and try to get what Marketo was trying to get in the marketplace was going to be very difficult," Springer said.

"For them to spend that much money again for relatively small revenue," he added, "risking that they wake up a year from now, [and] in the investment community, you all [would] say 'You guys are writing huge checks and not building very big businesses.' "

Responsys, like Neolane, has 400 customers. The San Bruno, Calif.-based company generates close to $200 million in revenue from retailers such as Sears Holdings (SHLD) and Lands' End; airlines Southwest Airlines, Deutsche Lufthansa and United Continental Holdings (UAL) and financial services providers E-Trade Financial (UAL) and Allstate (ALL).

Atlanta-based Silverpop raised $25 million in April, but did not disclose terms of the deal. It has backing from NeoCarta Ventures, TTV Capital, Draper Fisher Jurvetson and D.E. Shaw. It leans more heavily toward business-to-consumer than business-to-business marketing, Brown said, through mass e-mailings.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ADBE $94.22 0.00%
CRM $75.80 0.00%
IBM $145.94 0.00%
ORCL $39.86 0.00%
TDC $25.30 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs