Salesforce to Acquire GoInstant

Salesforce.com (CRM - Analyst Report) s is set to acquire a technology start-up called GoInstant. The total value of the deal is estimated to be around $76.0 million.

GoInstant was started with seed capital of $1.7 million, raised by private equity firms Freestyle Capital, Baseline Ventures and Greylock Partners, among others. The company was founded in 2010 with 14 employees, primarily manufacturing a tool which enables end-users to remotely and jointly browse and manage the same web page.

GoInstant sells the service as a premium product to customers like Joyent and Formspring, which use it for improving customer service.

Salesforce has also acquired a number of social enterprise companies over the past year, with the most recent being Buddy Media for $745.0 million. Though this deal may temporarily result in lower margins and profit for the company, it will help Salesforce to tighten its grip in the social enterprise area, which is attracting the attention of major businesses across the globe.

In November last year, Salesforce acquired mobile and cloud service provider Model Metrics to enhance its mobile and social expertise. The company also acquired human resource software company Rypple, which specializes in performance management and goal-setting. Salesforce believes that the cost of the acquisition will have a negligible impact on its fiscal 2013 revenues.

Salesforce has always adopted new technologies from different companies, either through technical collaboration or acquisitions. We see continuous product launches and deal wins as positives.

However, low-margin government deals, foreign exchange fluctuations and stiff competition from key players such as IBM Corp. (IBM - Analyst Report) and Hewlett-Packard Company (HPQ - Analyst Report) may challenge the growth prospects of the company to a certain extent.

Currently, Salesforce has a short-term Hold rating, as denoted by the Zacks #3 Rank.