Feeds

Oracle inhales Taleo for $1.9bn

Blows it onto the Fusion app cloud

Internet Security Threat Report 2014

Only two months ago, Taleo, the seller of online talent management software, was saying that it intended to remain independent despite the cloud software feeding frenzy. But today, Larry Ellison, CEO and co-founder of Oracle, made Taleo CEO Mike Gregoire an offer he couldn't refuse: $1.9bn.

That price, net of cash and debts, represents a 38 per cent premium over the market capitalization that Taleo had at the market close yesterday.

The online jobs board from which Taleo sprung was founded in 1996 by Martin Ouellet in Quebec City and was originally called Viasite. The company moved to San Francisco in 1999 and changed its name to Recruitsoft. In 2004, as the company was growing and finding its niche peddling human resources management and talent management applications, it moved to Dublin, California, and changed its name to Taleo. The company went public in September 2005 and has done eight acquisitions since then to build out its online software portfolio. The company now has 5,000 customers and some 200 million people registered in its systems that have been hired or at least looked at by its customers as they seek to fill jobs.

Taleo's online apps, known collectively as Talent Intelligence, are available in 31 different languages and sold in 187 countries. A few of these apps serve as the engine behind a number of jobs boards while others are used by companies to hire and manage their people.

What Talent Intelligence was, of course, is stiff competition for Oracle's own PeopleSoft and now its cloud-enabled Fusion Suite, which launched last October at OpenWorld and which was anchored by nine human capital management modules that were no doubt going up against Taleo's products. If you can't beat 'em, buy 'em.

"Human capital management has become a strategic initiative for organizations," said Thomas Kurian, executive vice president of development at Oracle in a statement announcing the acquisition. "Taleo's industry leading talent management cloud is an important addition to the Oracle Public Cloud."

In a presentation (PDF) that Oracle released, the company said that Taleo's cloudy worker management applications currently manage 15 per cent of all hiring in the United States and crank through 16 billion transactions per year. Nearly half of the top 30 job search and career sites in the world are powered by Taleo's back-end systems. It is not clear what infrastructure Taleo chose for its back-end systems or where it runs them, but they will no doubt be slurped into Oracle's data centers at some point.

What is clear is that Oracle wants to park Taleo apps next to RightNow cloudy tech support services (which Big Larry acquired back in October) and mash them up with its Fusion Apps to make a cloud play to customers who don't want on-premises applications. Oracle spent $1.5bn to buy RightNow Technologies, which had 2,000 customers and $185.5m in sales in 2010, with $28.4m in profits.

If you have a small but profitable cloudy app stack, Larry is paying some pretty good premiums if you want to be rebranded Fusion.

Taleo is used by Oracle rivals Dell and Hewlett-Packard as well as a number of big names across the big industries.

Taleo has not yet reported its financial results for its fourth quarter of 2011. The company had just under $95m in sales in 2006, with a loss of $5.8m, and had $237.3m in revenues in 2010 with a net gain of $420,000. Over the five years, Taleo booked an aggregate of $827.2m in sales, most of it for its applications but some from consulting services, and has lost a combined $9.7m. In the nine months of 2011 ended in September, Taleo had $224.1m in revenues, up a tidy 31.8 per cent, but it swung to a net loss of $13.6m compared to a gain of just over $1m in the prior three-quarter period in 2010. Basically, Taleo has a good product but it can't seem to get the black ink down to the bottom line.

Can you say Sun Microsystems?

The Taleo acquisition is subject to approval from Taleo shareholders and from the usual government regulators. Oracle says it expects the acquisition to close in the middle of this year sometime. Unless, of course, someone has a big wad of cash and they want to get into a bidding war with Larry Ellison. SAP is in the process of trying to pay $3.4bn for Taleo competitor SuccessFactors, so there's one company that already has a full plate and won't be doing such a counter-bid. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
Intel, Cisco and co reveal PLANS to keep tabs on WORLD'S MACHINES
Connecting everything to everything... Er, good idea?
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.