June 15, 2010, 3:29 PM

Analytics play: IBM announces deal to buy Coremetrics

The deal willl enable IBM to more quickly respond to online customer activity.

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By integrating Coremetrics’ web analytics technology with IBM Corp.’s WebSphere Commerce e-commerce platform, IBM will enable more effective online marketing campaigns that quickly respond to online customer activity, the companies say.

“This expands our business analytics capability by helping organizations get real-time insight into the interactions of their customers and their prospects, through social media networks and by a rapid link to targeted marketing campaigns,” Craig Hayman, general manager of IBM WebSphere, said today during a conference call announcing the planned acquisition. “We like to think we’re empowering marketing professionals to optimize their marketing processes.” Terms of the deal were not disclosed.

Coremetrics serves a client base of more than 2,000 online brands, including 1-800-Flowers.com, Petco, Office Depot, Holiday Inn, Victoria’s Secret and Virgin Atlantic Airways. It has 108 clients listed in the Internet Retailer Top 500 Guide, making it the third-largest analytics vendor listed in the Guide.

Coremetrics had rejected a number of other suitors in recent years, but decided that IBM was a good fit that would provide global resources to support its growth while also maintaining its focus on customers, Joe Davis, CEO of Coremetrics, said during the call. “Of our core values, customer success is No. 1, and we don’t plan on changing that,” he said.

He added that IBM and Coremetrics have worked together for about five years to support each other’s technology. For example, the two jointly developed Coremetrics for IBM WebSphere Commerce, which is designed to provide web site managers a view of visitor activity and automatically create targeted marketing campaigns based on site visitor behavior.

IBM said it plans to integrate the approximately 230 employees of Coremetrics into IBM. The two companies will continue to operate separately while the acquisition plan goes through a regulatory review.

If the acquisition goes forward as planned, IBM and Coremetrics clients can expect to see tighter and more extensive technology integrations, says Joe Stanhope, an e-commerce technology analyst with Forrester Research Inc. “Strategically, IBM thinks high level in how it helps companies to be more agile in serving customers,” he says. “This shows IBM recognizes that marketing professionals need to have a seat at the table.”

This deal follows IBM’s acquisition in recent years of SPSS, a provider of predictive web analytics, and Cognos, a provider of business intelligence software for monitoring corporate-wide operations. Although IBM plans to integrate Coremetrics into its WebSphere web site technology group, it also plans to eventually use Coremetrics’ technology to complement the SPSS and Cognos applications, Hayman said.

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