By Shira Ovide
Oracle Corp. on Monday agreed to buy startup Datalogix Holdings
Inc., an important advertising partner to Google Inc. and Facebook
Inc. The deal shows how big software companies are refashioning
themselves into marketing powerhouses.
Datalogix is working with Facebook, Google and Twitter Inc. to
prove that ads bought on their websites compel people to buy the
advertised products in brick-and-mortar stores. Datalogix does this
by matching information about Facebook or Google users with
retailers' email databases and in-store purchase histories.
Datalogix said it also works with Ford Motor Co. and Kraft Foods
Group Inc.
The deal spotlights the billions of dollars of acquisitions
struck by Oracle, Salesforce.com Inc. and Adobe Systems Inc. as
they increasingly target high-spending marketers. The software
titans are motivated by the growing role of technology in crafting
personalized sales pitches for consumer products such as soda, cars
or movies.
"Marketing services increasingly depend upon the integration of
technology and data. Oracle and Datalogix bring each what the other
most needs to thrive," said Jon Elvekrog, chief executive of
advertising-targeting firm 140 Proof.
Oracle alone has acquired four major marketing-tech companies in
the last two years. This year, Oracle closed its purchase of
BlueKai, a startup that lets marketers track Web surfing habits to
target ads, and a $1.6 billion purchase of Responsys, which tailors
email marketing. Last year, Oracle bought marketing-services firm
Eloqua for about $935 million.
Oracle didn't disclose what it agreed to pay for Datalogix.
Marketing executives say Datalogix, known in the industry as a
data broker, has a valuable trove of information about people's
shopping habits, gleaned from loyalty cards and other marketing
programs. The purchasing data helped attract the attention of
Facebook and Google, which have started working with Datalogix and
others data brokers to allow advertisers to target users based on
the data brokers' information.
Marketing executives say there isn't much potential for conflict
between Datalogix's new owner and Web giants such as Google and
Facebook, in part because those firms already work with the
marketing-services arms of Oracle and Salesforce.
But the acquisition has the potential to draw Oracle into
increasing regulatory scrutiny of how Datalogix and its peers
collect and use consumer data. Earlier this year, the Federal Trade
Commission said Congress should consider legislation to require
data brokers to provide better information to consumers on what
data they have, and to give consumers the option to exclude their
personal details from use by marketers. "Lack of transparency and
choice remain a significant source of concern about this industry,"
the FTC said in May after examining nine data brokers, including
Datalogix.
Privacy-advocacy group Center for Digital Democracy on Monday
said the FTC should review the proposed Datalogix deal for its
potential impact on consumer privacy and competition for consumer
information.
The proposed acquisition also means Google will be working more
closely with Oracle on advertising, even as the two companies are
in a legal fight over Google's Android mobile-operating system. The
Supreme Court is weighing whether to hear a case involving a
copyright dispute over computer code owned by Oracle and used in
Android.
Oracle declined to comment on the FTC call for data-broker
legislation, the privacy advocacy group's demand for a review of
the acquisition, and its legal fight with Google. Datalogix
referred inquiries to Oracle.
The acquisition also is a turn of strategy for Datalogix, which
earlier this year began working with investment bankers to decide
whether to conduct an initial public offering of its stock. This
year, however, was a rocky one for many public marketing-technology
companies. Share prices of Rocket Fuel Inc. and Datalogix
competitor Acxiom Corp. have fallen sharply in 2014, for
example.
Elizabeth Dwoskin and Rolfe Winkler contributed to this
article.
Write to Shira Ovide at shira.ovide@wsj.com
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