Contact: Mark Fontecchio
Adobe plans to acquire Livefyre for an undisclosed amount. Livefyre is best known as a commenting platform for sites like CNN and The Huffington Post. More crucially, it provides a social comment aggregation product that businesses can use to better engage with customers. Adobe plans to integrate the technology broadly across its Marketing Cloud to help spur growth in its digital marketing unit, which accounts for about 30% of the company’s total revenue.
The deal highlights the relevance that social media is gaining for digital marketing platforms, but there are still challenges to overcome, such as quantifying the impact of social media on a company’s overall marketing efforts. That uncertainty has led to mostly sporadic M&A. Aside from a brief burst of activity a half-decade ago, highlighted by transactions such as Salesforce’s purchases of Radian6 and Buddy Media, deal flow in the social CRM market has come in dribs and drabs, according to 451 Research’s M&A KnowledgeBase. Most have been smaller transactions, such as Sprinklr’s reach for Get Satisfaction last year (see our estimate for that deal here). Livefyre has 155 employees and had raised $67m in venture funding, so it stands as one of the larger players in the sector.
As we wrote last year, the social media management space is on a growth trajectory that we expect to reach $2.5bn by 2019, more than twice the $1.1bn we saw in 2015. The growth comes as social media management vendors are evolving beyond simple digital marketing toward business functions such as customer service. Livefyre fits the bill, as do recent announcements by Facebook and LINE.
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