Salesforce.com (NYSE:CRM) announced on Monday that it will acquire social marketing company Buddy Media for $689 million.
The purchase is expected to be completed during the third quarter. Salesforce will pay $467 million in cash and $184 million in stock for Buddy Media, as well as $38 million in Salesforce stock options.
Buddy Media helps major corporate customers — including Ford (NYSE:F), Mattel (NASDAQ:MAT) and Hewlett-Packard (NYSE:HPQ) — position their brands using social media platforms like Twitter and Facebook (NASDAQ:FB).
The merger signals that competition over social media marketing has intensified, Reuters noted.
A number of firms have begun to focus on social media companies to build a marketing beach head in the rapidly developing industry.
In its successful bid for Buddy Media, Salesforce beat out Internet heavyweight Google (NASDAQ:GOOG) which also attempted to buy the company.
Analysts cited by Reuters said that the transaction’s value was consistent with other recent social media acquisitions.
Salesforce.com recently lowered its earnings outlook for the year from between $1.60 to $1.63 a share, down to a range of $1.45 and $1.49 a share, but increased its revenue guidance to a range of between $2.99 billion to $3.03 billion.
Sales of Salesforce.com sank more than 1% in Monday afternoon trading.