Social Media Consolidation Continues (As We Expected)

Facebook User Growth

Photo: CIA World Factbook, International Telecommunications Union, BII Estimates

When Oracle bought social media marketing software maker Vitrue for $300 million, we wrote that it likely foretold further consolidation in the market. We didn’t think we would be right so soon: AllThingsD reports that Salesforce.com is buying Vitrue’s big rival Buddy Media for $800 million. As we wrote then, what all these deals have in common is that they make clear that enterprise behemoths believe social media is real. Even though there is some scepticism around the performance of Facebook advertising, even enterprise software stalwarts (which means, even big corporate purchasers) agree with the idea that “social is for real” and that customers need to be reached on social networks. 

It’s important to understand what these companies do: they make software that makes it easier for big brands to manage their interactions with fans on line. While the tools Facebook provides are fine for a small business, a big brand will run dozens of pages in multiple countries in multiple languages, and be able to, e.g. run promotions across them and measure them independently and together, and so on. Regardless of how well Facebook ads do or do not not perform, this is a core function–reaching and interacting with customers and potential customers on social platforms–that large brands are always going to need, and so it is justifiably a sector in which there is a lot of interest.

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