Salesforce.com, Inc. (NYSE:CRM) officially declined to acquire Twitter Inc (NYSE:TWTR). Salesforce announced the intention to glean additional customer insights. However, the expected merger between the company and Twitter was put to rest by Salesforce CEO, Mark Benioff on Friday.
The tech behemoth signed an agreement with Krux earlier this month. The deal had a net worth of $700 million. Krux had been a long-term partner with Salesforce before this merger. In addition to this, Krux is a data-management platform that consists of over three million personalized profiles.
Due to this, and more Salesforce Krux may just make Salesforce purchase in Twitter redundant, leading to the conclusion Benioff arrived at, which resulted in him walking away from the merger.
Secondary reasons to why Salesforce Krux was a better deal than Salesforce Twitter
The first issue that major corporations are having in regards to investing into merging with Twitter is the price that the company has set out for investors. Although it is true that Salesforce may have collected a vast amount of data through the merger, they have done just as well for a percentile of the cost with Krux.
In addition to this, due to Salesforce and Krux’s lasting business partnership, Salesforce knew precisely what it would be able to do with Krux. As well as how to strategically integrate the merger into current business systems. However, the opposite was true with Twitter; there was no clear plan in place for actions following the merger.
There are speculations that the decline of purchasing Twitter, was due to the company losing out on re-acquiring LinkedIn in June. However, in the end, analysts admit that this was a smart choice from Salesforce.
How Salesforce will benefit from this merger
After the deal was announced CEO of Krux, Tom Chavez stated: “We will utilize our data management process to extend the Salesforce Marketing Cloud’s audience segmentation and targeting capabilities.”
A report illustrated that through the merger, 200 billion data collection events per month would be made available to Salesforce. In perspective, the report explains that this is equivalent to approximately ten tweets per second. Leaving Salesforce Krux, the best choice that Benioff could have made.
Salesforce stock closed at $74.27 rising by $3.64 or 5.15%.
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