February 9, 2012 – Oracle announced plans to acquire human resources and talent management provider Taleo for $1.9 billion.

Central to the proposed deal is Taleo’s Talent Management Cloud offering, which Oracle announced in a statement would be part of a comprehensive human resources and employee information management cloud created by both organizations. Taleo offers a slew of on-demand talent management offerings and its Talent Grid, a network of millions of job candidates, 140 partner solutions and thousands of enterprise customers.

In a news release on the announced deal, Taleo CEO and Chairman Michael Gregoire said the move gives Taleo more capabilities to offer its customers, and Oracle development EVP Thomas Kurian called the acquisition “an important addition to the Oracle Public Cloud.” Oracle announced in October that its Public Cloud was a centerpiece to its overall cloud computing strategy.

Lisa Rowan, IDC program director for HR, talent and learning strategies, says that the deal gives Oracle’s Public Cloud a new facet, making the deal “as much about the full [human capital management] suite as it is about SaaS.” However, that plays into enterprise needs, as Rowan says that IDC research indicates talent management customers are more concerned with HCM suite capabilities for analytics and end-to-end integration than as-a-service delivery.

Ventana Research CEO and chief research officer Mark A. Smith says Taleo’s overall portfolio shows plenty of overlap with Oracle Fusion HCM, which may cause some concern for existing Taleo customers in the way of platform updates.

“This is just a move to acquire customers and credibility in the cloud computing market of human capital management and get software and expertise in recruiting where Oracle lacked any substantive solution,” says Smith.

Taleo’s board of directors unanimously approved the deal at $46 per share, and Oracle anticipates it to close by mid-year. The deal still requires stockholder and regulatory approvals.

Taleo was founded in 1999, beginning from a Web-based job board in Canada, and recently itself acquired Jobpartners and Learn.com to expand its reach in Europe and e-learning tools, respectively.

It’s the first major deal announced by Oracle in 2012, and the biggest deal in the HR and talent management space since rival SAP announced a $3.4 billion buyout of SuccessFactors in December.

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