Is Jive Hoping for a Suitor?

IDC estimates the enterprise social platforms market will be worth $4.5 billion by the year 2016. That translates to an annualized growth rate of 43% over the next four years. The market is currently dominated by bigger players such as IBM, which commands more than 40% of the market share. Other big players trying to gain a stronger foothold in the market include Google and Microsoft. Google recently released its free collaborative tool, Google Drive. Microsoft spent $1.2 billion for the acquisition of enterprise social network Yammer. The growing might of these IT giants is hurting smaller players, which are finding it difficult to attract new customers.

Jive’s Financials
One such player, Jive Software (Nasdaq:JIVE) recently announced disappointing quarterly results. Revenues grew 51% over the year to $27 million, marginally ahead of the Street’s target of $26.8 million. The quarter’s net loss of $0.11 per share was in line with market expectations. A year ago, Jive recorded a loss of $0.68 per share for the quarter. The company also noted that the weak economy in Europe had a negative impact on its growth.

For the current year, Jive expects revenues of $110 million-$113.5 million, with an adjusted loss of $0.38-$0.42 per share. The Street expects revenues of $112.9 million, with a loss of $0.39 per share. Further, the company expects to end the current quarter with revenues of $28 million-$29 million and a loss of $0.10-$0.12 per share. Analysts were projecting revenues of $29.6 million with a loss of $0.10 per share for the quarter.

A New Product for Marketing Teams

During the quarter, Jive’s customer base grew only 5% from 676 to 707 as of the quarter ended March 2012. Most of this growth was driven by the company’s 30-day free trial initiative, TryJive. Analysts believe that even though Jive is adding new users to its customer base, the slow growth of new customers is a matter of concern.

To counter the slow growth, Jive is expanding its market offerings. Recently, it launched Jive for Marketing Teams, which is a social business platform designed for marketing teams. The tool lets teams connect with colleagues and partners outside the firewall, such as marketing agencies and contractors. The tool comes with features that include the ability to share and collaborate on documents, create groups, and access the content through mobile devices.

The stock is trading at $15.49 with a market capitalization of $0.96 billion. It touched a 52-week high of $28.15 in March 2012. Despite the fall, the stock is still trading above the December 2011 IPO price of $12.00 per share. Perhaps amidst the acquisition frenzy, the market is hoping for a larger company to pick up Jive at a $1 billion-plus price point.