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In a massive move into the human capital management space, Oracle has announced that it will acquire Taleo. Taleo is a market leader and the largest publicly held technology company in the recruitment and human capital management industry. About the acquisition, Thomas Kurian, EVP of Oracle said “Human capital management has become a strategic initiative for organizations. Taleo’s industry leading talent management cloud is an important addition to the Oracle Public Cloud.”

The move may be part of a larger trend and interest in this formally niche space, as we wrote about in an earlier article called, Recruiting Tech: 5 Game Changers for 2012. This move is clearly the fifth game changer: a big bet on human capital. We previously wrote:

“Recently SAP acquired SuccessFactors in a deal worth $3.4 bllion. The agreement not only opened up new cloud based service offerings to the legacy software giant, but also placed a sizeable bet on the strategic importance of enterprise talent management. Salesforce moved in parallel by buying Rypple, a provider of human capital management solutions. The software giants are placing a clear value on enterprise level employee management services. Further acquisitions are both likely and could be transformative. Any of the leading software players like Microsoft, IBM, Oracle, HP, CA, etc… could move into the talent management and recruitment space easily through acquisition. Let’s call this move as marked not just by a big bet on human capital software, but rather the merging of the human capital management function into the broader enterprise software space. Further consolidation could pull talent management out of the HR silo and integrate it into the normal enterprise workflow and supply chain.”

There is clearly a renewed and powerful interest in the recruitment technology industry. This big move by Oracle further legitimizes the space and should provide a powerful incentive for innovative companies in the HR and recruiting software space to continue building.

About the purchase, Taleo’s CEO, Michael Gregoire said “Taleo’s integrated cloud-based talent management solutions optimize how organizations hire, manage, develop and reward their employees and gives companies the intelligence needed to capitalize on their most critical asset — their people. Joining forces with Oracle gives us the opportunity to better serve our customers.”

in Mergers and Acquisitions]