IBM Buys Web Analytics Provider Coremetrics

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IBM this week said it will acquire Coremetrics, a privately held provider of cloud-based Web analytics applications used to analyze customer interactions online to build more effective and timely social media marketing and advertising campaigns.

Financial terms of the deal were not disclosed.

The purchase dovetails with Big Blue’s strategy to develop or acquire more Software-as-a-Service (SaaS) business applications, particularly those that incorporate business functionality and analytics with social networking sites such as Facebook and Twitter to give customers deeper insight into what consumers are saying and thinking about their products online.

“With this acquisition, we are extending our capabilities to give clients greater insight about customer behavior and sentiment about products and services, and give true foresight into their future buying patterns,” Craig Hayman, general manager of IBM’s WebSphere group, said in a statement.

Last month, IBM released an update to its SPSS Modeler predictive analytics software, an application that gives enterprise customers the ability to monitor and analyze social media data that’s constantly being updated and shared via Facebook, Twitter, RSS feeds, blogs and wikis.

IBM’s (NYSE: IBM) internal 2010 CEO Study found that 88 percent of top executives said getting closer to their customers will be their top priority in the next five years. Moreover, IBM said that 70 percent of the time, a customer’s first interactive with a product or a service takes place online.

“The combination of IBM and Coremetrics will maximize marketing expenditures and also make the buying experience more convenient, personal and interactive for consumers,” Hayman said.

The acquisition comes less than a month after IBM agreed to shell out $1.4 billion in cash to snare Sterling Commerceto bolster its software integration and application management suite.

IBM says it plans to spend at least $20 billion to make key strategic acquisitions in the next five years.

Coremetrics, based in San Mateo, Calif., delivers Web analytics, mobile analytics, targeted e-mail tracking and reporting tools that can be used by companies of any size to gauge reactionsto their various sales, marketing and online promotional campaigns.

Coremetrics, for example, provides an annual review and analysis of online shoppers’ habits and preferences during the holiday season. Its customers include the likes of Bank of America, Costco, 1-800-FLOWERS, QVC and Victoria’s Secret.

“Marketers increasingly need the ability to see across their organizations and the agility to make split-second decisions based on real-time data,” Coremetrics CEO Joe Davis said in a statement. “The combination of Coremetrics and IBM will deliver deeper business insights to address the real challenges and opportunities all companies face in an increasingly digital world.”

All 230 Coremetrics employees will be folded into IBM’s applications and integration middleware unit.

The deal is expected to close in the third quarter.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.