Salesforce (CRM) Shows Weakness as Gartner Says Most Social CRM Programs 'Unprofitable'

Salesforce.com (NYSE: CRM) is trading lower this morning, possibly on a semi-bearish report from Gartner.

According to the research firm, the social CRM market is expected to expand to $1 billion by the end of 2012, from $625 million in 2010.

Though the outlook seems positive, Gartner comments, "More than 100 vendors have social CRM offerings. Most are not profitable and generate annual revenue of less than $1 million."

Gartner also commented, "In order to thrive in the future, analysts said that social CRM vendors will need to provide clear benefits for companies and communities, demonstrating multiple use cases for sales, marketing and customer service processes."

R&D in social CRM will center on five areas, according to Gartner: (1) deeper integration with traditional CRM processes; (2) tools to measure ROI; (3) deeper integration with social network services — particularly Facebook and Twitter; (4) increased use of analytics; and (5) new use cases for social CRM.

Shares of salesforce.com are 1.3 percent lower Tuesday.

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