Marketo Marginalization Concerns Rise
NEW YORK ( TheStreet) -- Marketo
The cloud-based marketing software platform reported blowout second-quarter revenue results in July as its customer count increased to 2,592. Despite this, the marketplace's enthusiasm about the future growth of the stock appears to be giving way somewhat to the worries surrounding the company's ability to meaningfully reduce its heavy dependence on the salesforce.com's
Salesforce.com, the largest maker of customer-management software, in July finished acquiring the email, social and mobile marketing specialist ExactTarget, a competitor to Marketo in the lower-end marketing automation market. It was salesforce's biggest push yet to expand into online marketing, and a deal that was sealed after software giant Oracle
"They need to diversify away from salesforce.com actively and aggressively," Byron Deeter, a partner at global venture capital firm Bessemer Venture Partners cautioned of Marketo. And if Marketo can move up-market, the company can still do well, he added. Spreading out its risks by branching out its partnership and business market options, even if it means expanding into the higher-end enterprise marketing automation space where Eloqua has historically been stronger, are the best courses of action from here.
"My guess would be that they
All in all, it's unlikely that those salesforce.com developments will show up negatively in Marketo's financial results any time soon given that it typically takes a couple of quarters for bookings changes to trickle down to financials in the cloud business, and there is still a large, non-salesforce.com ecosystem rallying around Marketo. However, by 2014, the "clear negative" pressure that the ExactTarget acquisition is having on Marketo should begin to become self-evident.