Oracle acquires Taleo

software company Taleo for about $1.9 billion to expand in cloud computing and respond to a December deal by SAP, Bloomberg reports.

Holders of Taleo will get $46 a share, Redwood City, California-based Oracle, the second-largest software company, said in a statement. That's 18% higher than Taleo's closing share price on Wednesday.

Oracle is now the proud owner of the world's second-busiest software as a service (SaaS) solution provider, eWeek.com says.

Only Salesforce.com records and stores more daily transactions than Taleo, which has a bit more than 5 000 customers and focuses on small and mid-sized businesses and large enterprises.

Salesforce recently topped the 100 000-customer level - with about 30 million users - and has done as many as 120 million transactions in a day.

Taleo gives Oracle tools that help companies manage human resources, recruit employees and set compensation, Bloomberg Businessweek writes.

The deal provides a counterweight to SAP's planned acquisition of talent-management company SuccessFactors for $3.4 billion, according to Anurag Rana, a Bloomberg Industries analyst. Taleo and SuccessFactors focus on the fast growing business of delivering software over the Web, rather than installing programs on customers' computers.

“It's where the puck is going,” said Rana, a senior software analyst based in Princeton, New Jersey. “That's the model most software companies will go to over the next several years.”