RETAILERS ARE BUILDING THEIR OWN DIGITAL MARKETING DIVISIONS

As we noted in our Online and Mobile Industry M&A press release, large retailers are becoming increasingly active in digital marketing. We mentioned Walmart’s acquisition of Kosmix Corporation, a social media company, for $300 million. Kosmix is now part of @WalmartLabs, the retailer’s social and mobile commerce platform. In early January, @WalmartLabs acquired Small Society, a company that helps organizations create iOS applications for Apple devices.

Other retailers have completed deals related to digital marketing as well. For instance, The Home Depot announced its acquisition of Redbeacon.com on January 20th. 

Redbeacon utilizes technology that connects homeowners to local service professionals. As an example, Redbeacon's algorithm is capable of incorporating data from a consumer’s Facebook account in order to make tailored suggestions on which professionals users should hire.

In addition, online retailer Amazon.com acquired Quorus in the fourth quarter of 2011. Quorus develops marketing and social shopping applications for retailers, allowing companies to communicate and live chat with prospective customers based on the products they’re interested in purchasing.

These acquisitions by Walmart, The Home Depot, and Amazon.com shows there’s interest among retailers in growing market share by expanding established brands through social media.

FULL YEAR 2011 TRENDS REPORTS

Berkery Noyes has released eight Full Year 2011 Trends Reports. Here is some commentary from our managing directors based on the first four reports.

Media & Marketing Industry:

“The Media and Marketing Industry is continuing its strong recovery from a slow Fourth Quarter in 2010,” said Evan Klein, Managing Director at Berkery Noyes. “Marketing services and digital media companies have all benefited from a large increase in internet advertising revenues in 2011, and look to be promising segments for driving M&A activity.”

Software Industry:

“Companies involved with cloud computing and SaaS are showing strong levels of M&A activity,” said managing director Christopher Young of Berkery Noyes. “Going into 2012, more businesses will seek to convert from owning and maintaining licensed software to utilizing subscription based cloud solutions. Two of the largest Software deals in 2011, SAP’s acquisition of SuccessFactors and Oracle’s acquisition of RightNow Technologies, demonstrate an ongoing interest of integrating enterprise applications with cloud.”

Online & Mobile Industry:

“M&A activity for social media and analytics companies continues to grow as a broader range of players seek to capitalize on this evolution in media and marketing communications,” said Kathleen Thomas, Managing Director at Berkery Noyes. “The world’s largest retailer, Walmart, entered the market in April with their $300 million acquisition of Kosmix Corporation, and Kosmix, now known as @WalmartLabs, has already completed four deals.”

Financial Technology Industry:

“At present we are seeing destructive creativity going on in a number of financial service sectors,” said Peter Ognibene, Berkery Noyes managing director. “For instance, smart phones have become digital wallets and are enabling a host of banking and other mobile commerce activities. There has also been an increase in consumer focus on wealth management strategies. And as always in times of turmoil and uncertainty – there is a desire for more precise and forward looking risk management tools, especially enterprise-wide.”