Microsoft Takes Over Netbreeze (AAPL) (FB) (GOOG) (MSFT)

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The world’s largest software maker Microsoft Corp. (MSFT) acquired language analytics firm Netbreeze for an undisclosed sum to strengthen its CRM product portfolio.

Switzerland-based Netbreeze specializes in social customer relationship management (CRM), which includes the ability to identify influencers, buzz analysis, topic analysis, tonality or sentiment analysis, comparison between current to historical postings via data archives and independent adjustment of search configuration.

Further, Netbreeze can monitor a wide range of social networking sites such as Facebook (FB), Twitter, YouTube and numerous other websites, blogs and message boards. It also has the ability to analyze multiple languages such as German, English, French, Spanish, Russian, Arabic, Japanese, Chinese and Mandarin.

Thus, Netbreeze’s strength in multi-lingual analysis combined with data mining and text analysis may provide Microsoft Dynamics CRM the requisite tool for an in-depth analysis of customer preferences.

Currently, social media data has become a very important tool for companies to understand their target audience, which can make or break a product as well as a company. Thus, Microsoft can tap the monitoring and data analysis requirements of the business communities by offering its CRM solutions.

The Microsoft Dynamics CRM team is quite active on the acquisition front as it closely follows the acquisition of MarketingPilot a few months back. MarketingPilot provides marketing solutions that allow companies to better understand customer choices, based on which they are able to create multi-channel marketing campaigns.

Currently, just like other PC makers, Microsoft is also battling the slump in the PC market caused by the sluggish economy. In addition, the popularity of smartphones and tablets from Apple (AAPL) and Google (GOOG) has been cannibalizing its core PC market. Thus, it makes sense for Microsoft to strengthen its position in still-emerging segments such as data monitoring services.

Microsoft remains one of the best positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. We believe that Microsoft’s current investments are supported by its strong balance sheet and expect these to drive the next growth phase, improving prospects of market share gains.

Microsoft reported revenues, excluding deferrals, of $21.46 billion in the second quarter of fiscal 2013, up 34.0% sequentially and 2.7% from last year, in line with our estimates. All except the Entertainment & Devices segment grew both sequentially and from the year-ago quarter.

Microsoft has a Zacks Rank #3 (Hold).

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