The frenzy of buyouts in the HR software space continues as Salesforce is buying Rypple, a young social network like company. With clients like Facebook and a tagline of “The social way to improve performance at work”, Rypple made a strong case for itself as an acquisition.
Several factors are at work here:
Valuations
With a market cap in the stratosphere, Salesforce has billions to kick around any way it wants.
Oracle, SAP
Salesforce and others are in a rush to compete with the big boys in every market segment, even if it means buying their way there.
Buying talent
It’s unlikely that Salesforce will retain Rypple’s platform given that Salesforce already has a social platform of its own, so what Salesforce is really buying here is the talent at Rypple.
Accounting wizardry
It’s also a way of hiding the expense of getting talent since the purchase will be paid for in stock, reflected only as a tiny little addition to the mysterious ‘Goodwill’ account on its balance sheet.
Performance
Performance is the hot HR word of the day. How do we get more out of the talent that we have?
{ 3 comments… read them below or add one }
Gregg, nice post but one note. If I’m not mistaken I believe Rypple is build on the force.com platform so the technology should be a throw away…
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Sorry typo above.. the technology should NOT be a throw away…
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Michael
Thanks for correction and the follow up clarification.
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