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Salesforce Journal Authors: Yeshim Deniz, Elizabeth White, Pat Romanski, Ed Featherston, Maureen O'Gara

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Salesforce Buys Radian6

It figures the acquisition will boost its 2012 revenues by $45 million-$50 million and cut earnings by about 11 cents a share

A free-spending Salesforce.com announced its fourth acquisition in four months Wednesday when it said it's buying Radian6 for $340 million in cash and stock, mostly cash.

Radian6 is the Canadian start-up that eavesdrops on what people are saying about its customers' product on social networking sites like Twitter, Facebook, YouTube and LinkedIn as well as blogs and boards. It also spots influencers.

Companies like AAA, Dell, GE, Kodak, Molson Coors, Pepsico, UPS and reportedly half the Fortune 100 use the five-year-old closely held real-time monitoring service, whose current revenues, derived from subscriptions, are evidently way under what Salesforce is paying for the joint. It's evidently profitable or was a year ago.

Salesforce says the deal should close by July 31, the end of its second fiscal quarter, when it will pay about $276 million in cash (net of whatever Radian6 has on hand) and $50 million in stock for the outfit as well as write a check for $4 million to its founders and pay them an additional $10 million in stock subject to vesting conditions over the next two years.

It figures the acquisition will boost its 2012 revenues by $45 million-$50 million and cut earnings by about 11 cents a share. That means fiscal 2012 revenue of around $2.075 billion-$2.1 billion and a non-GAAP EPS of $1.24-$1.27 for Salesforce.

It looks like Radian6, which is reportedly building an add-on for Salesforce's Service Cloud, got to the handsome buy-out on only $9.5 million in Canadian venture capital that it got from Summerhill Venture Partners, Brightspark Ventures and BDC Venture Capital.

In December Salesforce bought Heroku, the Ruby on Rails PaaS start-up, for what was rumored to be upwards of $200 million and that place reportedly had next to no money coming in. It also bought the contract management start-up Etacts and then in January the web conferencing service Dimdim for $31 million.

At the end of January Salesforce had about $497 million in the bank.

Salesforce figures the acquisition will contribute to all its products: Sales Cloud, Service Cloud, Chatter and Force.com. It's supposed to bridge the public social networks and Chatter.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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