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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowWall Street analysts have spouted a lot of accolades in the past month for ExactTarget’s expanding role within its new parent company, Salesforce.com.
The local digital marketing software developer and San Francisco-based Salesforce.com, which doled out $2.5 billion in July for the Indianapolis tech firm, in September gave investors, analysts and customers their first look at a new version of Salesforce's Marketing Cloud, a platform that combines and coordinates email, mobile, social and website marketing.
ExactTarget co-founder and CEO Scott Dorsey and his team have taken the reins over the entire Marketing Cloud, now formally named the Salesforce ExactTarget Marketing Cloud.
ExactTarget, which has mostly focused on email marketing software since it began in 2000, is meshing its marketing automation and campaign management capabilities with other marketing tech firms Salesforce bought in the past couple years—mainly, Radian6, BuddyMedia and Social.com.
Publicly traded Salesforce doesn’t report its earnings by division, but Marketing Cloud is one of four units—along with Sales Cloud, Service Cloud and Salesforce Platform—at a company that is on track to report $4 billion in revenue this year.
Salesforce’s stock analysts shot off notes to investors within days of ExactTarget’s three-day Connections conference last month to laud the new Marketing Cloud. Terms such as “bull’s eye” were common.
“We believe that Salesforce is making an intelligent decision effectively leaving ExactTarget in charge of the Marketing Cloud, as we believe the company’s vision (which we were on board with prior to the acquisition) is further enhanced by the incorporation of the company’s other leading marketing assets,” wrote Tom Roderick, an analyst for Stifel Nicolaus and Co.
Virtually non-existent until a few months ago, Marketing Cloud has become one of Salesforce’s biggest focuses as it chases a prediction from Gartner Research that now preoccupies much of the tech industry—that chief marketing officers will spend more on technology than chief information officers by 2017.
“Email is a critical component of any company’s digital marketing strategy because it complements social and is the common thread among various social, mobile, and Web Campaigns,” wrote Barrington Research analyst Jeff Houston. “While younger generations are more reliant on social interactions, upon entering the workforce, they rapidly adopt email.”
ExactTarget declined a request from IBJ to comment on its role in Marketing Cloud.
Salesforce’s investors weren’t so enthused with the ExactTarget acquisition when it was announced June 4. Salesforce’s shares slid about 8 percent, to $37.80, the day of the announcement.
ExactTarget struggled with profitability in recent years as the company weathered the recession and spent heavily in areas such as research and development. It staged its initial public offering in March 2012.
Investors collected a steep 53-percent premium over the closing price the day before the June acquisition announcement. ExactTarget employees took home about $277 million in stock option gains, with more than $92 million going to the top executives.
Wall Street started to rally around Salesforce’s stock in August after Salesforce issued its first earnings report since the acquisition and boosted its projections for the year.
Salesforce shares were trading at $52.44 on Thursday morning, up nearly 40 percent since June 5.
For the most part, the September unveiling of Marketing Cloud reaffirmed analysts’ already bright outlooks for Salesforce. Thirty-seven out of 44 analysts rate the company’s stock as “buy” or “strong buy.”
Dorsey and Salesforce CEO Marc Benioff have maintained since the acquisition that the company will invest in ExactTarget.
The company has already cut some of its existing employees. Salesforce laid off about 200 people worldwide. An ExactTarget spokesman previously told IBJ the job cuts in Indianapolis would be “minimal.”
One concession ExactTarget made as it claimed dominion over Marketing Cloud was Pardot LLC, an Atlanta marketing automation firm, that is being moved to Sales Cloud.
ExactTarget bought Pardot for $95.5 million last year in a deal that later enticed Salesforce to consider buying ExactTarget.
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