Why Facebook Would Buy Kustomer – the “More Modern Salesforce”

Kustomer CEO Brad Birnbaum has told us in past interviews:

We are like Salesforce but 20 years newer and 20 years more modern. Once a decade, every product needs to be reinvented.

While Marc Benioff and Co. would no doubt take issue with this opinion, it tells a lot about the direction Kustomer and gives insight into why it would be a good M&A target as pointed out in Wall Street speculation regarding valuation of more than a billions dollars.

Simply stated, Facebook wants to continue to expand its business and the business market is a natural area for them to do so. The social network leader obviously makes a great deal of money from advertising and now they can expend this revenue by offering CRM services.

Right now, a Facebook advertiser might get new prospects and customers from ads and then convert these to Salesforce and the ecosystem of companies that surround the cloud-based leader.

From Facebook’s perspective, why would they want to lose this control?

By keeping this database in their own “cloud database,” where they can nurture them and eventually provide marketing automation as well, they provide a more complete, holistic service to advertisers.

The news – whether consummated or not, shows Facebook realizes the value in keeping the customer relationship within its own ecosystem as opposed to allowing it to migrate elsewhere. Facebook realizes it can be more than just a source of leads and customers – it can provide the tools, which allow companies to interact more naturally with their customer base.

Rich Tehrani is CEO of RT Advisors and a Registered Representative with and offering securities through Four Points Capital Partners LLC (Four Points) (Member FINRA/SIPC). RT Advisors is not owned by Four Points.

The above information was strictly a technical/business news article/review regarding the company(ies) mentioned. The information contained should not be considered and is not a recommendation to invest in or sell short the securities of the underlying company(ies).


 

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