ExactTarget's setbacks came during a period of rapid growth. The company's annual revenue climbed from $72 million in 2008 to $292 million last year while its payroll has ballooned from under 400 employees in 2008 to nearly 1,700 now.
Salesforce expects ExactTarget to trim its adjusted earnings during its current fiscal year ending in January 2014 by 16 cents per share. The deal is expected to close by the end of next month.
Salesforce CEO Marc Benioff has become accustomed to shaking off the skeptics. He was frequently mocked when he started his San Francisco-based company in 1999 and boldly predicted its model for leasing business software applications would revolutionize the technology industry. Even after Tuesday's sell-off, Salesforce now boasts a market value of $22 billion. Benioff's personal fortune stands at an estimated $2.6 billion.
Benioff, an executive known for sweeping statements, hailed the ExactTarget deal "as really a historic date for cloud computing" during a Tuesday conference call for analysts. He is counting on ExactTarget to help Salesforce sell more marketing services on mobile devices. As part of its marketing expansion, Salesforce previously spent nearly $1.1 billion to buy Buddy Media and Radian6 Technologies during the past two years.
Once the ExactTarget deal is completed, Benioff said Salesforce plans to take a "vacation" from deal making for 12 to 18 months.
"That's really because we're going to double down and focus on the success of ExactTarget," Benioff assured analysts.
Sign up for CIO Asia eNewsletters.