"The market has seen a lot of acquisition activity. It's drawing a lot of interest [from bigger players] because it's hot -- it's doing very well," she said.

IBM's plans to add a layer of enterprise social networking across the Kenexa applications are on target because social connections and social media have become a key component to recruiting, she said.

IBM expects the Kenexa deal to close in this year's fourth quarter, after it receives approvals from Kenexa shareholders and regulatory bodies.

In the second quarter of 2012, ended June 30, Kenexa had revenue of $86.3 million, and a net loss of $1.7 million, or a loss of $0.06 per share. That compares with $69 million in revenue, and a net loss of $1.6 million in last year's second quarter.

The IDG News Service