Tuesday, October 14, 2008

Omniture Acquires Mercado for a Song

Almost exactly one month after Omniture released its re-branded Site Search solution (formerly Atomz) to the market, they announced last night the acquisition of long-time site search entity Mercado. This acquisition, following on the heels of the previous announcement tells me that this was a somewhat opportunistic move and based primarily on the deal price of Mercado.

Frankly, it’s disappointing to me that Mercado only drew $6.5M for “certain assets” which apparently contain “additional technology and expertise” and “certain…intellectual property and business assets” depending on how you interpret the press release. As a long time follower and fan of Mercado’s search technology, it’s too bad that the deal price was so low that it could have been a Friday afternoon tin-cup exercise across departments at Omniture. None the less, Omniture just added a best-in-class search solution to its Marketing Optimization platform, moving it that much closer to amassing its Coup de grace for the Online Marketing Suite category.

Mercado has built up a substantial business catering to the eCommerce market since its launch over a decade ago with a competitive search solution. Customers currently utilize the solution in both hosted and licensed versions and marquee clients include Macy’s, Sears and REI. Last spring, Mercado underwent a rebranding exercise and debuted a new logo that symbolized the customer journey through the 3 lifecycle phases (acquire, convert and retain). Their goal was to promote dynamic commerce through search using rich attributes and social data. I have a ton of respect for the Marketing team at Mercado and truly believe that they were onto something with their vision of improving the online shopping experience. They felt that the traditional eCommerce paradigm created tunnel vision for consumers and that sites must find a way to deliver the peripheral vision obtained in the offline world into online commerce.

Yet, yesterday’s acquisition brings several questions to mind, including:

• How many of Mercado’s (approximately 200) customers are also Omniture clients?
• Will the addition of a site search solution really affect new prospective customers for Omniture?
• Is this acquisition aimed squarely at retailers in an attempt to gain more market share within that vertical?

Neither Omniture nor Mercado were immediately available for comment, so I suppose my questions will have to wait. What do you think of this news…?


HomeProspect said...

Bummer when they have to sell so low or even get out of the business because they think they've used up all their talent. Who's next?

John Lovett said...

hmmm...an email service provider perhaps?