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Google to Integrate Wildfire

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Google Inc. announced that Wildfire, a marketing start-up, will no longer work as a standalone entity.

In 2012, Google acquired Wildfire for approximately $250 million to strengthen its foothold in the world of social media. Wildfire provides software that helps businesses to place ads on social-media sites like Facebook, Inc. (FB - Free Report) , Twitter, Inc. (TWTR - Free Report) , LinkedIn and Pinterest. It has roughly 16,000 customers, including Spotify, Virgin, Inc. and Unilever. These companies use Wildfire technology to manage their social media campaigns across various platforms.

However, from now on, Google plans to curtail investments for building new features or accept new Wildfire customers. Instead, Wildfire’s software will be completely integrated into Google’s ad technology platform allowing marketers and advertisers to use social data to improve their marketing campaigns.

Google is a market leader in online advertising and it has been trying to explore various ways to increase its advertising revenues and counter competition. In the recently concluded quarter, net advertising revenue, excluding TAC, was up 12.4% sequentially and 19.6% year over year.

The company stepped up its efforts in social media with Google+, a social networking service started in 2011 that competes directly with Facebook. The addition of Wildfire’s software will likely bolster Google+ and provide insights about rival platforms such as Facebook. The successful integration will help Google to improve its competitive position in the social media space.

The company continues to acquire smaller companies with specialized technology to diversify its offerings. In the social media space, Google bought Meebo — a social media start-up that makes mobile applications for consumers as well as publishers for online communication — for about $100 million in 2012. In 2013, Google bought at least 18 companies.

Google’s fourth-quarter gross revenue came in at $16.86 billion, representing sequential and year-over-year growth of 13.2% and 16.9%, respectively. Revenues from both Google-owned and partner sites continued to grow in double digits on a year-over-year basis. Historically, Google has always fared better than Yahoo, which has been struggling to uphold itself, and Microsoft, which is yet to gain critical mass.

However, legal issues related to competitive matters or patent infringements remain an overhang. Google currently carries a Zacks Rank #3 (Hold).

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