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10/4/2002
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Pivotal Addresses Product Gap

Acquisition of MarketFirst will let Pivotal provide the lead- and campaign-management capabilities that had been missing from its CRM suite

Pivotal Corp. made a move to shore up a hole in its CRM suite Thursday, acquiring marketing-automation vendor MarketFirst Software Inc. in an all-stock transaction. Pivotal is issuing 725,000 shares, or less than a 3% stake in the company, to MarketFirst's shareholders. The deal, which awaits shareholder and regulatory approval, is expected to close this month.

MarketFirst's lead- and campaign-management software provides Pivotal with the ability to deliver the fully integrated suite of CRM tools its customers need, CEO Bo Manning says. In the past year, the midsize companies Pivotal serves have completed restructuring efforts and turned their attention to marketing efforts and go-to-market strategies, he adds. That shift has placed an emphasis on the MarketFirst's capabilities, which Manning says Pivotal will take to all 1,500 of its customers.

The addition of MarketFirst's technology to Pivotal's suite should mean better qualification of leads, and thus more-effective field sales efforts for Pivotal customers, Gartner VP Robert DeSisto says. The acquisition of MarketFirst will let Pivotal provide a better bridge from marketing to sales, which had been a weak spot in Pivotal's product line, he adds.

However, investors didn't take so kindly to the news, driving Pivotal's already waning stock price down 36% to 65 cents, and dropping the value of the deal to $471,000.

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