Today: Oracle (ORCL) and Adobe (ADBE) agree to acquire cloud companies to beef up offerings that are showing success. Also: Facebook announces another revenue-generating move that could annoy users, Wall Street stalls as "fiscal cliff' maneuvering carries on.
Oracle and Adobe lead another round of cloud-software acquisitions
Oracle and Adobe must have read Wednesday's Biz Break about their successes in the cloud-software space, as both companies announced new acquisitions of software-as-a-service, or SaaS, companies Thursday.
Oracle made the day's biggest deal, shelling out $871 million for Eloqua, a cloud-based marketing software company. Eloqua will form the backbone of a new marketing-focused cloud enterprise division within Oracle, expanding the offerings that helped Oracle increase software sales revenue by 17 percent in its most recent quarter.
The deal is a rich one, as the Redwood City software giant paid a 31.1 percent premium on Eloqua's latest closing share price of $17.92 and more than twice as much as shares commanded when the Virginia startup went public in August at $11.50 a share.
The price of $23.50 cost Oracle slightly more than its recent history of cloud acquisitions, which includes its $1.5 billion purchase of RightNow Technologies and $1.9 billion acquisition of Dublin-based Taleo. Bloomberg News pointed out that Oracle paid more than nine times Eloqua's trailing 12-month revenues, while that multiple was 6.3 times for Taleo and 7.1 times for RightNow.
"Oracle paid up," Cowen analyst Peter Goldmacher told Bloomberg. "They see a real opportunity in marketing automation."
Eloqua offers software that helps companies manage and track email marketing campaigns with its customers, but executives said that the company will grow those offerings with Oracle's weight behind it.
"The Oracle-Eloqua combination will create a customer experience cloud offering which helps organizations transform the way they market, sell, support and serve their customers," Joe Payne, Eloqua's CEO and chairman, wrote in a blog post on Eloqua's website.
"Eloqua's leading marketing automation cloud will become the centerpiece of the Oracle Marketing Cloud," Thomas Kurian, executive vice president of development at Oracle, said in the company's announcement.
Oracle's move was announced before markets opened Thursday, but Adobe waited until after the markets closed to announce its own cloud acquisition. The San Jose software company purchased New York startup Behance, which makes it easy for creative professionals to share their works on the Web with colleagues and fans.
The move seems like a natural fit for Adobe, which moved its Creative Suite to a subscription-based cloud model earlier this year and has found success with the change. Workers who pay to subscribe to the Creative Cloud applications -- InDesign, Photoshop and more -- can use the capabilities Adobe acquired with Behance to show off their work created with Adobe's product.
"Behance will play a key role in Adobe's efforts to serve the creative world in the years to come and will accelerate our efforts to enable a more open and collaborative creative community," Adobe executive David Wadhwani said in the company's announcement, which did not disclose a purchase price.
Even Red Hat, a North Carolina company that offers Linux-based hardware, got into the act Thursday, announcing the $104 million acquisition of ManageIQ, a cloud-management startup. Business Insider reports that the move will help Red Hat challenge Palo Alto's VMware for private clouds in the enterprise sector.
Thursday's flurry of cloud acquisitions is unlikely to be the end of a spree of such deals that has lasted since Oracle's October 2011 purchase of RightNow. Eloqua was an important partner for San Francisco's Salesforce, former Oracle executive Marc Benioff's company that was the first to push hard into cloud software, and with a sparkling new office building, it may look to replace what Eloqua provided. Cowen analyst Goldmacher mentioned Salesforce as a company that could look to purchase a cloud-based marketing company, while also SAP, IBM and Adobe (before it made its deal) as possibilities.
Oracle dropped 0.4 percent Thursday to $33.94, while Eloqua gained 32 percent to $23.66, reflecting the acquisition price. Adobe dropped 0.6 percent to $37.87, but rebounded a bit in after-hours trading following the acquisition announcement, gaining 0.2 percent. Red Hat, which also announced solid earnings Thursday after the bell, gained more than 6 percent in late trading.
Facebook's revenue hunt continues, but users could be annoyed
Facebook announced Thursday that it would begin charging users $1 for the privilege of sending messages to Facebook members with whom they are not connected, another move by the Menlo Park social network that could push revenues higher but also anger the site's users.
Currently, Facebook places messages from a member's friends in their main inbox, while stashing all other messages in a folder marked "other," which most Facebook users never check nor realize exists. Taking a cue from LinkedIn -- which allows those with premium subscriptions greater freedom in contacting members -- the company launched a test Thursday that will place messages in a member's inbox for $1.
"For the receiver, this test allows them to hear from people who have an important message to send them," Facebook said in its announcement.
The possibility of spam messages could be a negative for users, however, and the test follows a report earlier this week that Facebook would begin pushing video ads that play automatically into users' news feeds. Both of those stories followed the brouhaha that erupted earlier this week when Facebook-owned Instagram changed its terms of service in preparation for monetization and sparked a user revolt.
Facebook stock dipped 0.2 percent to $27.36 Thursday.
Wall Street rises slightly, but Valley tech stocks dip
Wall Street advanced slightly Thursday, with all three major U.S. stock indexes adding between 0.2 and 0.6 percent, as investors continue to wait for a resolution to the "fiscal cliff" talks, which didn't seem to move much Thursday, as Republicans scheduled a House vote on a "Plan B" solution that the Senate and president have said will not receive their needed approvals.
In Silicon Valley, stocks were less successful, as the SV150 index of the region's largest technology companies dropped 0.3 percent on the day. Apple (AAPL) declined 0.9 percent as its global patent battle continued at home and abroad, following a slight setback in its case Wednesday. Netflix (NFLX) dropped 0.5 percent a day after news that the Los Gatos video-on-demand company is facing its own patent lawsuit, from the owners of San Francisco-based OpenTV.
Silicon Valley tech stocks
Down: SolarCity, Advanced Micro Devices, Electronic Arts (ERTS), Gilead, Zynga, Splunk, Apple, NetApp, Palo Alto Networks, Adobe, Tesla, Netflix, Oracle, Intel (INTC), VMware, Facebook, Cisco (CSCO), Intuit
The tech-heavy Nasdaq composite index: Up 6.03, or 0.2 percent, to 3,050.39
The blue chip Dow Jones industrial average: Up 59.75, or 0.45 percent, to 13,311.72
And the widely watched Standard & Poor's 500 index: Up 7.88, or 0.55 percent, to 1,443.69
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.