Oracle has nabbed one of the jewels in the marketing world, Datalogix. It bought the company on Monday for an undisclosed amount.
There are a lot of questions surrounding this acquisition.
Why didn’t Oracle disclose the price?
Why did Datalogix sell to this particular buyer, when it had a strong relationship with Facebook (was it a bidding war)?
And why did Oracle buy this company at all, when it already had one of its biggest competitors, BlueKai?
We’ve got some partial answers to all of those and some educated guesses for the rest.
Why Oracle? Because Of Omar Tawakol
Datalogix was a star in the online advertising world because it solves a really hard problem. It helps prove that an online ad campaign really makes people walk into the store and buy stuff. It’s hard to match the person who looked at an offer on their phones or PCs with the person who walked into a store. But by using big data analysis, Datalogix analysed purchasing patterns, matched them to online ad campaigns to show how well a particular ad campaign worked.
About a year ago, Facebook COO Sheryl Sandberg was full of praise for Datalogix, saying it helped Facebook show companies that Facebook ads do drive sales.
A lot of people are pointing out that Oracle already had a company that manage Facebook and Twitter ad campaigns. It bought BlueKai almost a year ago. This company also specialised in tracking who people are as they surf the web via PCs and smartphones.
Half of BlueKai’s tech, the part that did that kind of tracking, was added to Oracle’s Marketing Cloud.
But there was another half to BlueKai’s tech, a part that let advertisers buy ads based on people’s online activities. This became a new cloud service, run by former BlueKai CEO Omar Tawakol, who is now GM of the Oracle Data Cloud.
Tawakol is the one who bought his one-time competitor, Datalogix, for Oracle.
But they weren’t just competitors. They have been partners since 2012.
Oracle envisions Data Cloud to be way bigger than just helping marketeers place ads. It’s going to be a service that sells all kinds of data on what people are doing on the ‘net for all kinds of reason, sales, talent management, business analysis,Tawakol told AdExchanger.com earlier this month.
So Oracle will be adding Datalogix to its relatively new Data Cloud run by Tawakol.
Thumbing Its Nose At Salesforce
About the same time that Datalogix was signing up Google as a partner, it was also signing on Salesforce as a partner: April 2014.
Salesforce had added Datalogix to its Marketing Cloud, a product in fierce competition with Oracle’s Marketing Cloud. This acquisition can’t be making Salesforce very happy.
Oracle Probably Didn’t Pay $US1 Billion
Datalogix had been looking for a buyer, AdExchanger’s Kelly Liyakasa reported earlier this month.
Sources told Liyakasa that Facebook was in the hunt, as was Adobe and Nielsen and that Datalogix was asking for a $US1 billion.
Datalogix had raised over $US86.5 million including a mysterious, not-announced investment by Jim Breyer, characterised as “significant” by the company. It was enough to grant him a board seat. Breyer is famous for his early investment in Facebook and for his work on Facebook’s board from 2005 until 2013.
But no one was apparently interested in paying $US1 billion for Datalogix, sources told Liyakasa. Datalogix had increasing competition from Acxiom, Epsilon, and even BlueKai, all of which are Facebook partners, too. It had estimated 2014 revenues of $US125 million but wasn’t profitable, and margins might have been thin, sources told Liyakasa. As of June, it had 400 employees.
The low-end bids were coming in at $US200 million, Liyakasa reported. Facebook ultimately dropped out of the hunt, she reports.
Oracle didn’t disclose terms, which indicates that this was not a huge $US1 billion purchase. (It would be hard for Oracle to argue that $US1 billion isn’t material enough to report.)
Sources told Business Insider that Oracle paid $US350 million to $US400 million for BlueKai last year. It didn’t report terms on a deal that size. And remember it was BlueKai’s CEO orchestrating this deal. Would he have paid double for a competitor? It seems doubtful.
Several sources we talked to said they didn’t hear of a bidding war going on for Datalogix. Without that, it would have been difficult for the company to get a premium price.