SMB online marketing marriage: Vocus pays $169M for iContact

The merger will combine SMB search marketing, social marketing, email and public-relations services into one platform by late 2012.
Written by Heather Clancy, Contributor

And so it begins. One of the key tips that I discussed on last week's Small Business Matters webcast ("10 Online Marketing Tips for Small Business") was pretty simple, "Keep things integrated."

So, it was with interest that I read today about cloud marketing and public relations software company Vocus plans to pay $169 million to buy iContact, which offers an integrated email and social media marketing application that is hosted in the cloud.

The reason I think this is extremely interesting is that tools such as iContact (and Constant Contact and HubSpot) really speak to the need to keep things simple. Social media can be a time-suck, so the extent to which small-business owners can keep things better integrated, all the better. Anyway, I speculated out loud that we would see some consolidation in this space. Lo and behold.

Under the deal, Vocus plans to buy iContact for $91 million in cash, $9 million in common stock, and $79 million in redeemable convertible preferred stock. The iContact technology will allow Vocus to extend add email and social media management to the Vocus service, which focuses on search marketing and social marketing.

The iContact platform is supposed to be integrated into the Vocus offering late in 2010; at that time, iContact's roughly 70,000 customers will have the option of keeping their standalone product subscription or upgrading to an even more integrated SMB marketing suite.

iContact has been around since 2003, when it was founded by two students from the University of North Carolina, Ryan Allis and Aaron Houghton. It is based in Raleigh-Durham, N.C. Vocus has its headquarters in Beltsville, Md.

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