More Than Just Chatter at Salesforce.com

Jan.11.11 | About: Salesforce.com, Inc. (CRM)

By Ben Kolada

Fresh from closing its $249 million acquisition of Ruby developer Heroku, Salesforce.com (NYSE:CRM) recently announced, and closed, its purchase of Web-conferencing startup Dimdim for $31 million. The Lowell, Massachusetts-based target provided a cloud-based open source Web-conferencing service for businesses, and with this deal salesforce.com now claims 60,000 Chatter users, though with its "freemium" model we suspect that only a fraction of these are paying customers.

Salesforce.com paid $31 million in cash for Dimdim, which had raised a total of $8.4 million from venture investors Draper Richards, Index Ventures and Nexus Venture Partners. Per salesforce.com’s conference call, Dimdim has 75 employees spread throughout its offices in Lowell and Hyderabad, India. Although the target’s annual revenue wasn’t disclosed, we estimate that it closed 2010 with about $2 million in revenue.

Like salesforce.com’s previous collaboration pickup – GroupSwim, in December 2009 – Dimdim’s services will be shut down, and its capabilities will be rolled into Chatter, salesforce.com’s social collaboration software service that first launched in 2009.

As my colleague Kathleen Reidy notes (click here to see her full report on the acquisition), as evidenced by the almost immediate shutdown of the Dimdim service, salesforce.com isn’t interested in the pure Web-conferencing market. Salesforce.com will honor contracts with Dimdim’s existing customers, though these will not be eligible for renewal, and it has terminated Dimdim’s free service.

Dimdim also had an open source distribution and while this is still available, it won’t see any further updates. Instead, Dimdim will provide features to Chatter, which is also incorporating semantic analysis technology from GroupSwim.

Disclosure: No position