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What the Radian6 Acquisition Really Means

Posted March 30th, 2011 by Andrew Goodman

Radian6, a Canadian social media monitoring startup, has been acquired by Salesforce for $320 million, $250 million of that in cash. This is a relatively rare slam dunk for the Canadian venture capital community (Radian6′s investors include BCE Capital, Brightspark, and Summerhill Ventures), who often have difficulty finding enough domestic pure digital media and software deals to assess.

Like many, I can’t comment directly on the quality of the platform or the ROI it provides to customers. More than anything, the company seems to have established a lead and momentum in a space by getting into the right space at the right time, and then executing brilliantly. The analysis we’re hearing in the blogosphere is that they are part of “helping companies get more social”. Partly true.

But what they really are is Google 2.0.

I don’t mean they were poised to become the next Google. Google is worth north of $150 billion.

But Google Search, intellectually, is founded on PageRank. And PageRank was an innovation that sought to solve, in part, the difficulty of assessing reputation online. Google’s solution was relatively narrow in 1998, yet it was still a huge leap forward from the spam-ridden previous generation of entrants in the web search game.

Radian6, and companies like it, take that slice of what Google is and get heavily involved in mapping the future. Who’s talking about my company? If you were to rate how much reputation we have, and what type of reputation we have, as if you were some kind of neutral arbiter, what would our score be? How can we do better?

Consumers — end users — are ultimately the ones gaining massive amounts of control as the old corporate bullhorn gets inverted. It is companies and vendors (and people who are selling themselves) who will be subjecting themselves to the court of public opinion. Online reputation is complex. Tools to measure it — Google included — will become more complex.

Investments in adjusting to this new consumer-empowerment “empire” make a lot more sense than continuing to pour all the same media buying dollars into the same old bullhorn.

As companies like Radian6 work on understanding the complexities of reputation, one day, collectively they may surpass today’s search engines. Or they’ll be working alongside search engines, patenting and pioneering whole new ways of curating, listening, and rating vendors, companies, and self-promoters.

The complexities of measuring and acting upon measures of corporate reputation are 100,000X more complex today than when Google got started. These principles will soon apply to businesses of all sizes in all verticals — not just “corporates”. They’ll also apply to individuals, whether they’re subject matter experts, people seeking dates, job applicants, or students applying to Ivy League colleges.

Companies like Radian6 address just a portion of that addressable market. They work alongside the “places” and “environments” where reputation is created — whether that be the open Web, or Google, Twitter, Facebook, or Yelp. What they have accomplished to date is just the tip of the iceberg.



2 Responses to “What the Radian6 Acquisition Really Means”

  1. You are spot on…we help organizations listen to their communities. Using our platform they can cut through the noise and distill and respond to relevant conversations. Thank you for sharing our exciting news.

    Lauren Vargas
    Director of Community at Radian6
    @VargasL

  2. I think the acquisition highlights that social media monitoring is maturing as a marketing skillset and the value that is being placed in monitoring as a means of highlighting just how useful the additional data that social media offers a business helps it to grow and do business better.

    This union not only validates the market, but it brings social media marketing to the masses and sets the stage for a deeper dive into social media insights. Simply having access to social media monitoring tools is not enough; marketers must understand how to analyse and act on the data they collect, incorporating it into the broader marketing mix. Listen outside the box.

    With Salesforce.com’s core business being customer service and lead generation, it makes sense that the newly forged companies will focus on helping companies build social CRM strategies. However, one of the true values of social media monitoring remains in its data, insights and the way it can therefore be used to understand and shape the business and marketing strategy.

    James Ainsworth
    Community Manager for Web & Social Solutions – Alterian


 


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