The Zacks Analyst Blog Highlights: Oracle, SAP, Facebook, McDonald's and Yahoo!

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May 25, 2012, 09:30 ET

CHICAGO, May 25, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Oracle (Nasdaq:ORCL), SAP (NYSE:SAP), Facebook (Nasdaq:FB), McDonald's (NYSE:MCD) and Yahoo! (Nasdaq:YHOO).

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Here are highlights from Thursday's Analyst Blog:

Oracle Set to Buy Vitrue

The competition for dominating the cloud-based software-as-a-service (SaaS) market is heating up as arch rivals Oracle (Nasdaq:ORCL) and SAP (NYSE:SAP) look to outdo each other on the acquisition front. Recently, SAP announced its intention to acquire business & commerce network company Ariba Inc. Almost at the same time Oracle announced its plans to buy Vitrue, a cloud-based social-marketing software developer.

Although Oracle did not provide any financial details of the transaction, the company is reportedly paying $300.0 million for the start-up, which has received more than $33.0 million in funding from venture capitalists including Scale Venture Partners and Advent Venture Partners to date.

Based in Atlanta, Vitrue offers solutions which marketers use to collect and collate social interaction data from Facebook (Nasdaq:FB), Youtube, Twitter, Google+ and many other social networking platforms. With the help of this data, marketers develop campaigns for the target audience which is eventually delivered across these social networks and devices. The company boasts a strong clientele that includes the likes of McDonald's (NYSE:MCD) and Yahoo! (Nasdaq:YHOO).

We believe that the acquisition will boost Oracle's customer relationship management (CRM) customer base going forward. The Vitrue acquisition will also help it to rapidly expand in the social marketing segment dominated by Buddy Media, Wildfire, Involver, ThisMoment, and many other small start-ups. Moreover, we believe that the acquisition will help Oracle to provide an end-to-end cloud CRM service over the long term.

Cloud Computing: Oracle & SAP Rivalry Continues

The latest acquisitions of both Oracle and SAP reflect cut-throat competition to gain the top-spot in the Cloud based SaaS market. SaaS is a software delivery method that enables data access from any device with an Internet connection and web browser. In this web-based model, software vendors host and maintain servers, databases and codes that constitute an application.

SaaS has gained immense importance in recent times due to the increasing adoption of cloud computing. Demand for SaaS-based products have been steadily on the rise for some time and is expected to increase greatly based on some inherent benefits associated with the platform.

Applications delivered over the SaaS platform not only allow enterprises to start using them instantly, but are also more cost effective, as compared to traditional products installed at a customer's onsite data center.

Moreover, SaaS applications are more scalable and they can be continuously upgraded as compared to the traditional products. According to market research firm Gartner, sales of online software, which touched $10 billion in 2010, is expected to more than double to $21.3 billion by 2015, much faster than traditional software.

To gain an upper hand, both Oracle and SAP have been on acquisition sprees recently. Both acquired companies from different sectors, which they expected would not only expand their product portfolios but also provide a competitive edge. However, being a late entrant in the cloud computing market, Oracle has been the more aggressive of the two in recent times, in order to catch up.

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