UPDATED 19:44 EDT / OCTOBER 03 2016

NEWS

Salesforce continues acquisition spree with $700 million Krux purchase

Still hungry after $4 billion in acquisitions in the past year, Salesforce.com Inc. today said it’s buying the ad tech firm Krux Digital Inc. for $700 million.

San Francisco-based Krux, which operates a data management platform that helps marketers target pitches to particular audiences across devices and marketing channels, said combining with Salesforce’s Marketing Cloud will allow even more precision targeting. Krux claims customers such as Kellogg, Mondelez and Time Warner.

Krux’s systems also will feed more data into Salesforce’s upcoming Einstein artificial intelligence technology, which is expected to be unveiled in more detail at the company’s Dreamforce conference this week in San Francisco.

The acquisition, which will be done with equal parts cash and stock, will complement the Salesforce Marketing Cloud, created through several acquisitions since 2011. Sales competes in marketing automation with Oracle Corp., Adobe Systems Inc., IBM and of course ad giants such as Google Inc. and Facebook Inc.

The acquisition follows those of several other companies in the past year, such as Demandware, Quip and BeyondCore. Salesforce Chief Executive Marc Benioff also said recently that his company was a bidder for LinkedIn Corp., which Microsoft scooped up for $26 billion in June. Salesforce is challenging that deal in the European Union.

It’s also said to be a potential bidder for Twitter Inc., along with Google and others. But the acquisition of Krux, with its massive amounts of customer data, may make Twitter less attractive to Salesforce, especially given the service’s $17 billion market capitalization and the possible need to offer a premium above that.

“We view the news very favorably as it should help the company to expand its marketing cloud business above and beyond what might have otherwise occurred,” Pivotal Research Group analyst Brian Wieser said in a note to clients today. “It also serves to further illustrates the blurring lines between ad tech, marketing tech and digital media.”

Cofounder and Chief Executive Tom Chavez (above) portrayed the acquisition in a blog post as a play for greater scale, a constant challenge for ad tech companies in the era of Google’s and Facebook’s increasing dominance of digital advertising. “We’re trading gas for rocket fuel,” he said.

“Krux is regarded by many of our industry contacts as one of the premiere data management platforms for both publishers and marketers,” Wieser said. “Data management platforms are important because they are commonly the strategic hubs of marketers’ technology stacks, used to segment audiences for them and publishers too. DMPs are also notable as a key piece of technology that helps to bridge marketing technology and ad technology.”

The six-year-old company had raised $50 million in venture capital. It has about 180 employees.

Photo courtesy of Krux

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