IBM Takes on Adobe in Web Analytics With Coremetrics Buy

For the past five years, IBM (IBM) has partnered with Coremetrics, an online marketing analytics firm, to develop a product for Big Blue's WebSphere Commerce. The software helps companies analyze user behavior and develop more effective marketing campaigns.

Now, the relationship has gone to the next level: IBM agreed this week to purchase Coremetrics (the price tag wasn't disclosed). The deal is expected to close in the third quarter.

With Coremetrics, IBM will tap into several major tech trends: Cloud computing, data mining and optimization.

A Look at Coremetrics

Founded in 1999, Coremetrics has built a strong platform to optimize marketing programs. This includes measuring search engines, email targeting, ad impressions and cross-selling -- all in real-time.

With the information, Coremetrics helps create personalized recommendations, promotions and sales incentives. This can be done with traditional outlets, like catalogs, or even social media sites like Twitter and Facebook.

As a testament to its technology, Coremetrics has built a blue-chip customer base, which includes companies like Bank of America (BAC), Holiday Inn (IHG), PETCO, Victoria's Secret (LTD) and Virgin Atlantic Airways.

While IBM is known mostly for back-end software applications, this approach is starting to change. Business software is starting to look more like consumer applications. Just look at offerings from companies like Salesforce.com (CRM) or NetSuite.

The Impact

Over the years, IBM has made several key acquisitions in the web analytics space, such as SPSS and Cognos.

And yes, Coremetrics will be a nice fit. It also helps that IBM has a long-standing relationship with the company and has already integrated the technology.

With IBM's extensive global customer base and distribution network, Coremetrics will likely become a pervasive offering and accelerate marketing analytics. The deal should also be a concern for Adobe (ADBE), which last year bought Omniture -- a rival to Coremetrics. The competitive pressures will definitely ramp up over the next couple years.