Marc Benioff, co-founder and CEO of Salesforce, acknowledges a purchase of Twitter may seem like a mismatch, given that Salesforce sells software to businesses while Twitter is a consumer-technology company. But it is not unusual for Benioff to go against the grain.
SAN FRANCISCO — Marc Benioff, founder and chief executive of Salesforce.com, showed up onstage at his biggest customer event of the year to talk up his business-technology company’s products and strategy.
But what was arguably the higher-stakes meeting was held later that day. At the plush St. Regis San Francisco Hotel, Benioff presided last Wednesday over a gathering with Wall Street analysts and investors. His aim: to assuage their concerns about his plan to buy Twitter, the struggling social-media company.
“We look at a lot of things,” Benioff told the room, without directly mentioning Twitter. “The number we acquire is very few.” Still, he said, “it gives us ideas” to look at companies.
Marc R. Benioff
Career: Co-founded Salesforce.com in 1999, CEO since 2001. Previously at Oracle for 13 years, ending as senior vice president. During college, he worked as an assembly language programmer in Apple Computer’s Macintosh Division.
Compensation in 2015: Salary, $1.4 million; total cash compensation, $5.5 million; option awards, $34.4 million.
Shares owned: 35 million, worth roughly $2.5 billion
Sources: Salesforce, S&P Capital IQ
For weeks, the technology world has been buzzing about Benioff’s intentions, after it emerged last month that Salesforce was interested in bidding for Twitter.
At first glance, the two companies could not be more different. Twitter is where celebrities, politicians and countless other individuals broadcast their thoughts in 140-character messages. Salesforce, on the other hand, makes online software for salesmen and marketers.
Yet Twitter would fit into a vision that Benioff has had for Salesforce, which he founded in 1999, as a company that can help enterprises with all of their customer needs. Twitter, in Benioff’s eyes, is already a powerful customer-service tool that airlines, restaurants, banks and many other companies use to field consumer complaints and requests. Companies can also use what people post on Twitter to glean consumer habits.
“This is a huge messaging and communications service,” Benioff, who turned 52 last month, said in an interview on his way to the St. Regis. He added, “I use mergers and acquisition activity to think about the market.”
Benioff faces a battery of challenges in buying Twitter. Skeptical investors have pushed Salesforce stock down by about 5 percent since news broke that the company was considering bidding for the social-media company. Behind the scenes, investors have been grousing about a potential purchase. Any deal would likely be Salesforce’s largest, with Twitter valued at about $14 billion. Salesforce, which is unprofitable, has a market capitalization of about $48 billion.
Twitter investors appear dubious, too. The company’s stock dropped more than 20 percent Thursday as speculation about other suitors seemed to dissipate.
“This would be a disaster,” said Joel Fishbein, managing director at BTIG, a financial services firm. “Benioff is a visionary, but this could blow up. Engineers could leave Salesforce, and it would send the stock down 30 or 40 percent.”
Benioff acknowledged that Salesforce would face difficulties in taking over Twitter, given that Salesforce sells software to businesses while Twitter is a consumer-technology company. The chief executive, who is an activist in areas like gay rights and gender equality, also said he was troubled by the amount of hate speech on Twitter.
But it is not unusual for Benioff to go against the grain. The San Francisco native worked at Oracle, the business-software company, for years before founding Salesforce as an online software firm in 1999, when online software was still unproven.
Salesforce soon became the largest maker of so-called customer relationship management, or CRM, software sold over the cloud, which is used by salespeople and marketers at companies like American Express and General Electric. Salesforce went public in 2004.
Along the way, Salesforce became one of the largest employers in San Francisco and Benioff became one of the city’s richest men. He has turned part of his fortune toward philanthropy, donating millions of dollars to a new children’s hospital in San Francisco that bears his family’s name, as well as pledging money to the city’s public schools.
“Marc wants to be well thought of, to feel like he’s doing things the right way,” said Adam Bosworth, a Salesforce executive who left in August to work at Amazon. Bosworth recalled once disagreeing with Benioff on a management issue and sending him an email with the subject line, “You are not being a mensch.”
“It was the fastest response I ever got from him,” Bosworth said.
Benioff has courted attention as Salesforce has grown. San Francisco’s tallest building, which is now under construction, is set to have the Salesforce name. The chief executive has publicly crusaded for political causes like gay rights in Indiana, where Salesforce has a big office. He holds mindfulness workshops with Buddhist monks from a group that has been staying at one of his San Francisco mansions for the last year. Last week the streets of his city were jampacked with people attending his company’s annual conference (Oct. 4-7).
To increase Salesforce’s business, Benioff has been on a buying spree, purchasing companies that can help build up data or capabilities in technologies like artificial intelligence, as well as features that broaden how Salesforce can serve customers.
Last week Salesforce said it was buying Krux, a little-known advertising company with more than 30 petabytes of information on 3.5 billion devices, in a deal valued at more than $700 million. That followed a $750 million purchase in August of Quip, a maker of real-time collaboration software. Quip co-founder Bret Taylor, a veteran of Google and Facebook, is on the board of Twitter.
Much of the data that Salesforce is gaining through acquisitions can help power artificial intelligence, which Benioff thinks will soon be everywhere. “We’ve bought about a dozen AI companies, built whole new teams,” he said in a recent interview.
But the biggest deal was one that got away. Earlier this year, Benioff tried to acquire LinkedIn, the professional social-networking site, which has data about professionals and jobs. Salesforce lost to Microsoft, which is paying $26.2 billion for LinkedIn. Salesforce has since raised concerns over the deal with Europe’s antitrust authorities.
Without LinkedIn, Benioff turned his sights to Twitter, which has been trying to figure out how to rev up its growth.
Benioff, who is himself a power user of Twitter, said Wednesday that while it was essential that Salesforce be in AI, there was more to Twitter than that.
“It’s a huge customer-service platform,” used by companies like Dell, Apple and Bank of America, he said in the interview on the way to the St. Regis. “It’s not a reason to buy it, but it’s a reason to look at it. I’m not saying I’m buying it, but I’m not saying I’m not buying it.”