Oracle splashes out for cloud-based HR software company Taleo

Oracle has started 2012 by snapping up HR-software company Taleo in a deal worth $1.9 billion

Oracle has agreed to acquire cloudy “talent management” company Taleo for $1.9 billion, in a deal that marks one of the biggest deals of 2012.

Taleo’s cloud-based software is aimed at HR departments and Oracle said it was buying the company to build a “comprehensive cloud offering for organisations to manage their Human Resource operations and employee careers.”

"Human capital management has become a strategic initiative for organisations,” said Thomas Kurian, executive vice president for Oracle Development. “Taleo’s industry leading talent management cloud is an important addition to the Oracle Public Cloud.”

Oracle’s move will take it into closer competition with Marc Benioff’s Salesforce.com, which just last month agreed to buy HR software maker Rypple.

That deal is expected to go through on 30 April and means Salesforce.com could be supplying Facebook with HR SaaS as the social networking giant is one of Rypple’s customers.

Benioff and Oracle CEO Larry Ellison, once close allies at Oracle, have been treading on one another's toes recently. Benioff even had his keynote at Oracle OpenWorld cancelled last year.

Oracle's acquisition announcement came on the same day Taleo announced its fourth quarter financial results, in which it saw subscription revenue rise 26 per cent year-over-year to hit $70 million.

"Taleo's integrated cloud-based talent management solutions optimize how organisations hire, manage, develop and reward their employees and gives companies the intelligence needed to capitalise on their most critical asset - their people," said Michael Gregoire, chairman and CEO of Taleo.

"Joining forces with Oracle gives us the opportunity to better serve our customers."

Oracle has not been averse to splashing the cash of late. In October last year, the company bought cloud customer service provider RightNow for $1.5 billion.

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