Why the Radian6 acquisition is a great thing

Some may question the price, but this deal is a win-win for all involved

Much has been made of the recent acquisition of Radian6, a New Brunswick based social media monitoring company by Salesforce, the CRM-in-the-sky giant. Some have derided the acquisition as being a foolish one on behalf of Salesforce. My favourite comment on Hacker News was: “As someone who has used Radian6 before: Good luck, Salesforce… you’ll need it.” Specifically, the price ($326MM) seems to be on the high end of things and that seems be a source of much of the pushback against the acquisition.

But I think this was a great move by Salesforce and a good sign for those in the industry, on the whole. For Salesforce, they immediately gain customers into their fold. Of Radian6’s existing customer base, I’m sure some are already with Salesforce, but this is now another sales channel for Salesforce, another product for them to sell, up-sell, and up-sell some more. Just as Apple doesn’t just sell iPhones, Salesforce needs more product lines to push in addition to their CRM and Chatter applications. Well, why not just build it themselves? Because they have cash, Radian6 generates cash, and Salesforce can quickly assimilate Radian6 into their platform. In fact, prior to the acquisition, Radian6 was listed as a featured partner on Salesforce’s AppExchange site.

But this deal is a sign that social media analysis has reached a level beyond Twitter “gurus” douchabaggery. It means that large corporations on the whole are starting to “get it” and understand that their customers, both potential and current, are broadcasting their behaviours, their preferences, and their complaints. The ability to interact directly with customers for free (or at a very small marginal cost) has always been the Holy Grail for marketers and instead of relying on surveys and focus groups with subjective quality and accuracy can now go straight to the source. Why didn’t Betty like her flight on Delta airlines? Ask her, she’s on Facebook and Twitter. You know she just took a flight from Toronto to New York because she complained about the check-in at Pearson. No more guessing, you know what your customers are doing.

The army of companies who offer similar services to Radian6 must be licking their chops now. They can see that a large exit isn’t out of the realm of possibilities. Just as Urchin getting acquired by Google signalled the new era of web analytics, so too does this acquisition bring in a new era of analytics of social media. The next 10 years will be defined by organizations’ abilities to data mine and extract insights from their all-too-public customers.