Oracle buys web firm Eloqua to boost cloud presence

Fri Dec 21, 2012 12:25am IST

Pedestrians walk past an Oracle tent during Oracle OpenWorld 2012 in San Francisco, California October 1, 2012. REUTERS/Stephen Lam/Files

Pedestrians walk past an Oracle tent during Oracle OpenWorld 2012 in San Francisco, California October 1, 2012.

Credit: Reuters/Stephen Lam/Files

Related Topics

Stocks

   
Inside the Peshawar school

Inside the Peshawar school

The aftermath inside the Pakistan school where at least 132 students and nine staff members were killed by Taliban gunmen.  Pictures 

REUTERS - Oracle Corp ORCL.O agreed to buy Eloqua Inc (ELOQ.O), a maker of web-based marketing automation software that listed in August, for about $810 million as it seeks to expand its cloud-computing services.

Eloqua makes software to help businesses predict and grow revenue by monitoring marketing and sales initiatives. Its customers include AON Plc (AON.N), Dow Jones, Automatic Data Processing Inc (ADP.O), Polycom Inc (PLCM.O) and National Instruments Corp (NATI.O).

Oracle, which came late to cloud computing, is trying to be a one-stop shop for operating systems, databases, computer programs and infrastructure over the Web.

"The acquisition of Eloqua will add a leading market automation solution to Oracle's strong salesforce automation products and the recently acquired RightNow call center automation solution," Nomura Equity Research analysts said in a research note.

Oracle bought RightNow Technologies last year for $1.5 billion, sparking several more acquisitions in the cloud-computing market including IBM Inc's (IBM.N) acquisition of Kenexa and SAP AG's (SAPG.DE) purchase of SuccessFactors.

Oracle, which has traditionally offered installed software products, then bought Taleo, a cloud-based HR software firm.

"We would expect Oracle to continue to make acquisitions in this space, to bolster its Fusion Applications suite and respond to competitive pressure in the applications market from SAP and Salesforce.co," Nomura said.

Oracle priced the deal at $871 million, net of Eloqua's cash. Based on the 34.5 million Eloqua shares outstanding as of October 31, the equity portion of the deal came to $810 million.

Cloud computing, a broad term referring to the delivery of services via the Internet from remote data centers, is a favorite with corporate technology buyers because it is faster to implement and has lower upfront costs than traditional software.

Oracle Chief Executive Larry Ellison mocked cloud computing in 2008 as "complete gibberish". He described it as a fad, comparing the computer industry to the fashion world.

But Oracle has since introduced its own web products and acquired several firms selling internet-based software as its corporate customers embraced web services offered by Salesforce.com Inc (CRM.N), Amazon.com Inc (AMZN.O) and Google Inc (GOOG.O).

"Although Oracle already had strong marketing functionality, this gives it a cloud offering to deliver and an additional base of midmarket customers providing a recurring license maintenance stream," Nucleus Research analyst Rebecca Wettemann said.

The company's $23.50 per share offer for Eloqua represents a 31 percent premium to Eloqua's Nasdaq close on Wednesday.

Eloqua shares jumped to match the offer price while Oracle's shares were flat at $34.05 on the Nasdaq.

"Eloqua's leading marketing automation cloud will become the centerpiece of the Oracle Marketing Cloud," said Thomas Kurian, Executive Vice President of Oracle Development.

Eloqua's board has unanimously approved the deal, which is expected to close in the first half of 2013.

Oracle said on Tuesday that software sales growth will stay strong into the new year despite fears that there could be big tax hikes and U.S. government spending cuts that could cause a slump in spending by customers.

(Editing by Don Sebastian and Rodney Joyce)

FILED UNDER:

REUTERS SHOWCASE

26/11 Accused

26/11 Accused

Pakistan to appeal bail for Mumbai attack "mastermind".  Full Article 

Android For cars

Android For cars

Exclusive: Google aiming to go straight into car with next Android – sources.  Full Article 

Mass Stabbing

Mass Stabbing

Eight children killed in Australia in reported mass stabbing.  Full Article 

In Distress

In Distress

Former SpiceJet owner leading rescue plan: reports.  Full Article 

PM's Moves

PM's Moves

Modi moves in to speed up $300 billion stuck projects.  Full Article 

Losing Popularity

Losing Popularity

Dalai Lama's star waning in the West, China official says.  Full Article 

Tis' The Season

Tis' The Season

Stars around the world wish you Happy Holidays.  Video 

Cyber Warfare

Cyber Warfare

For N.Korea's cyber army, long-term target may be telecoms, utility grids.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device   Full Coverage