Dimdim Service To End; Non-core Employees Laid Off

Salesforce's recent buyout of US and India based Dimdim for $31 million will mean the end of the cloud-based web conferencing service that registered 6,000 paying customers over 3 years. Dimdim's underlying technology will be integrated into Chatter, the company's collaboration platform for enterprises.

Dimdim's web conferencing, presence-awareness, messaging and screen-sharing will be integrated into Salesforce Chatter, which allows executives to follow colleagues, groups and share files and status updates.

"Effective immediately, we will no longer sell Dimdim's service. Instead, we will be focusing the engineering team on integrating Dimdim's real-time communication capabilities with Salesforce Chatter over the next year," said Dimdim founder and CEO DD Ganguly, in response to an email questionnaire. Salesforce.com completed the acquisition and physical integration with Dimdim on January 6, 2011. Ganguly refused to disclose revenues and profitability of the company and added, "The revenue isn't material to salesforce.com."

It is learnt that Salesforce is laying off non-core employees as well as salespeople at Dimdim. Sources add that the company is paying them salaries for six months and also aiding them in getting jobs. The company has refused to comment on the layoffs. Ganguly said, "We don't comment on rumurs or speculation. Dimdim's management team including myself will stay intact and remain focused on cloud-based communication and collaboration innovation."

The $1.7 billion Salesforce employs 4,700 employees in San Francisco.

Ganguly refused to answer if there were other suitors for Dimdim. The integration of Dimdim into Salesforce.com was completed on January 6, 2011. He said, "Salesforce.com gives us the opportunity to apply our expertise and align our vision of real-time, social enterprise in the cloud -- at a scale that wouldn't have been otherwise possible."

Dimdim raised a total of $8.4 million in two rounds of venture funding from Nexus Venture Partners, Index Ventures and Draper Richards. Suvir Sujan, Co-founder, Nexus Venture Partners, said, "This acquisition is a testament to the potential of Indian technology product companies' ability to have a global impact. The acquisition is an important milestone for the Indian technology industry, which is witnessing a shift from services to products."