Technology icon Oracle (News - Alert) Corp. announced it will buy cloud-based talent management company Taleo Corp. for $1.9 billion, or $46 a share, according to media reports.

The price is an 18 percent premium to Taleo’s Wednesday closing price, MarketWatch reported.

The companies plan to create a “comprehensive” cloud offering for companies to manage their human resource operations and employee careers, according to a company statement released Feb. 9.

The Board of Directors of Taleo unanimously approved the transaction, which is expected to close mid-year 2012, subject to Taleo stockholder approval, regulatory approvals and other routine closing conditions.

Taleo’s Talent Management Cloud helps organizations attract, develop, motivate and retain human capital to improve performance and drive growth, Oracle said. Taleo’s talent management cloud will be an asset for Oracle’s public cloud, according to Thomas Kurian, executive vice president, Oracle Development.

“Human capital management has become a strategic initiative for organizations,” Kurian said. “Taleo’s industry leading talent management cloud is an important addition to the Oracle Public Cloud.”

The acquisition, Taleo officials said, will allow employees and managers to effectively manage careers throughout their entire employment, help organizations to retain talent and optimize costs, and improve the employee experience through faster on boarding and better collaboration with team members via social media.

“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,” said Michael Gregoire, chairman and CEO of Taleo. “Joining forces with Oracle gives us the opportunity to better serve our customers.”

A few years ago, Oracle Chief Executive Larry Ellison reportedly dismissed the need to “push more decisively” into online software, Dow Jones Newswires said. Ellison claimed that companies that sold their products were not very lucrative. But times have changed, with Oracle on a buying spree, aggressively pushing its way into cloud-based services.

In October 2011, Oracle agreed to pay $1.5 billion for RightNow Technologies (News - Alert) Inc., which makes online customer-management software.

Officially in Oracle’s statement announcing the purchase, Kurian said, “Oracle is moving aggressively to offer customers a full range of Cloud Solutions including sales force automation, human resources, talent management, social networking, databases and Java as part of the Oracle Public Cloud. RightNow’s leading customer service cloud is a very important addition to Oracle’s Public Cloud,” TMCnet reported.

However, since RightNow’s Customer Service Cloud is designed to aid organizations in their delivery of “exceptional customer experiences across call centers, the web and social networks,” the common presumption among those in the media and analysts covering the acquisition, is the move has been made as a direct affront to Salesforce.com (News - Alert), which plays in the same market and is a direct competitor to RightNow.

The acquisitions indicate the increasing enterprise acceptance of the Software-as-a-Service (Saas) model, with HCM following in the footsteps of Customer Relationship Management (CRM) “as the next SaaS battleground,” according to Ovum (News - Alert) chief analyst Tim Jennings.   

“It also emphasizes the urgency that the major enterprise application vendors attach to establishing a strong position in cloud-based software. Both Oracle and SAP (News - Alert) have existing on-premise HCM solutions, but both have been prepared to pay out large sums on cloud-based equivalents, rather than simply transitioning their existing solutions to the cloud,” Jennings said. “Taleo will further advance Oracle’s public cloud strategy, joining the recently closed acquisition of RightNow for customer service management, Oracle’s Social Network for collaboration, and Oracle’s own Fusion applications.”