Ah, rumors. The stuff that makes stocks go up and down. At least juicy rumors keep things interesting.
There is some chatter in the blogosphere emanating from SiliconValleyWatcher that enterprise database vendor, Oracle Corp. (NASDAQ: ORCL) may be in the process of scooping up upstart Salesforce.com (NYSE: CRM). Not only is SVW hearing this from a reliable source but it appears the buyout may come at a very large premium -- 50% over CRM's share price today.
I feel like this tie-up has been telegraphed from the inception of Salesforce.com as an organization. Salesforce.com plays in the SaaS (Software as a Service) space, effectively letting both large and small sales organizations rent the software that manages their sales pipelines.
I've written about SaaS vendors previously and how they harbinge the future of the software industry. Combine a pay-as-you-go model that addresses the long tail of small businesses with the sales prowess of an Oracle at the Fortune 500 level and you have an extremely interesting M&A.
As SiliconValleyWatcher posits, it's going to come down to numbers. Salesforce's effervescent (understatement) CEO, Mark Benioff, came out of Oracle and could play the role of Larry Ellison's successor. Benioff knows he has some great assets and is looking to best capture their value.
Is Oracle going to pay up?
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no position in the stocks mentioned.
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Reader Comments (Page 1 of 1)
2-11-2008 @ 6:40AM
Adam said...
I covered this story on www.salesforcetimes.com as well after reading about it here. Seems the rumor mill is alive and well!
2-11-2008 @ 6:42AM
Joyce L Williams said...
as an addition to mutual prime investor in individual and institutional investments, under the weather of subprime operatives, i am just at a glance of whatever dictates the lessons learned behind the Bernanke Economic Stimulus package of where fed interest rates are being cut and adjusted to a minimum. several industries, financial or non-financial by industry are being absolutely swept up by mergers and acquistions and leveraged buy-outs. the cookie to the criminal is in exactly prime time with a zero based budgeting in place on top of recession el dinero
2-11-2008 @ 7:54PM
Tom Greenberg said...
Someone should go to jail over this news! This was a lame try by somoene to increase salesforce.com shares and then dump them!
Anyhow, Oracle migh buy Salesforce.com only if Microsoft or SAP show interest first.
Also, Salesforce.com being sold to Oracle should be good news for other on-demand crm rivals such as Entellium, Salesboom.com and RightNow!