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Google buys into social media with Wildfire

In this Thursday, April 12, 2012, file photo, Google workers ride bikes outside of Google headquarters in Mountain View, Calif.

Paul Sakuma/AP

Google Inc. is encroaching on Facebook Inc.'s social advertising turf with its acquisition of Wildfire Interactive, a marketing company that got its start selling Facebook ads and received initial financing from a fund sponsored by the social networking site.

While Google has failed to match Facebook's social network effects with its faltering Google+ platform, it is seeking to apply its strength in advertising analytics to measure the effectiveness of social ads, an area where Facebook has struggled to keep up with the demands of its advertisers.

"In a complex and changing landscape, businesses want to manage and measure these efforts in an integrated way," said Jason Miller, Google's product management director, in a blog post.

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Google's purchase of Wildfire, for a reported $250-million (U.S.), is the latest in a string of acquisitions in social media marketing, as large software companies come to see social media as an integral part of their digital marketing and customer management offerings.

Wildfire's 400 staff help companies market on all social channels, including Facebook, Twitter, LinkedIn, YouTube, and Pinterest. Until the deal, Google's digital advertising platform was lacking a social element.

"Google wants to be the leader in every single type of digital advertising," said Zachary Reiss-Davis, an analyst with Forrester. "Right now, they can't offer social marketing, so they're building out that part of their portfolio."

Google will also gain detailed insight into the growth of Facebook's advertising model through the deal. Wildfire launched four years ago using Facebook's technology and is one of the social network's preferred ad partners. Twice the company won funding from the fbFund, a seed fund for entrepreneurs building companies on Facebook, which is backed by Accel Partners and Peter Thiel's Founders Fund.

The deal highlights a growing tension between Google and Facebook as their business models increasingly overlap.

"The two companies are going to have to start collaborating more," Mr. Reiss-Davis said. "It's in both of their interests."

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