Software company expands to meet growing social-media needs

On a daily basis, many Michigan computer users rely on the products of the Oracle Corp., which is the world's largest manufacturer of database software.

Now, through a recent acquisition, Oracle is ready to branch out. It intends to acquire its third company in two months, hoping to tap into the social-media market that business owners currently are using to sell themselves to customers.

The smaller company Oracle plans to buy makes software that allows companies to reach their audience through Facebook and Twitter. It also helps companies start pages on Facebook for marketing purposes. Companies use such software to manage relationships with customers, to advertise or to receive analytical reports.

Oracle's aim, apparently, is to grab a bigger stake in the social-media management market. By 2016, the revenues in that arena are expected to reach $970 million, up from $389 million this year, according to research.

The Oracle acquisitions have been driven by the increase in Americans' usage of social media. Oracle wants its software to help sell advertisements for Facebook or send sponsored messages via Twitter. One of the companies it acquires sells software for marketing, sales and customer service. Another helps companies run their marketing campaigns via Twitter and Facebook, and the final company analyzes data about users that it got from websites.

One industry analyst said buying software to attract customers online is more appealing to companies, especially startups, than hiring full sales forces. There now is more investment in marketing via automation than via a sales force. That is why these acquisitions are so key for Oracle.

The Oracle acquisitions likely will pressure competitors to purchase companies that specialize in marketing through social media, the analyst said. He said several companies already have drawn attention for their work in marketing via Facebook and Twitter and could be attractive acquisitions for the right company.

Source: Bloomberg Businessweek, "Oracle Buys Involver to Expand in Social-Media Tools," Aaron Ricadela, July 10, 2012