Oracle, the world's biggest database developer, said it plans to acquire human resources software provider Taleo for $1.9 billion.

The news sent shares of Taleo up 17 percent to $45.50 in early trading, valuing the company at $1.89 billion. They closed at $45.64, up $6.70 at $45.64. The reason is that Oracle offered shareholders of the Dublin, Calif.-based company a hefty premium over Wednesday's closing price.

Oracle, based in Redwood Shores, Calif., has targeted the human resources sector as part of its growth strategy for years. One of its biggest acquisitions was the 2004 acquisition of pioneer HR developer PeopleSoft for $10.3 billion.

Taleo's integrated cloud-based talent management solutions optimize how organizations hire, manage, develop and reward their employees, Taleo CEO Michael Gregoire said. He said selling the company to Oracle will provide means to better serve our customers.

Taleo's software is well-known to job applicants applying to Fortune 500 companies online. It's used to collect resumes and screen information to corporate personnel departments.

Oracle's purchase comes only days after it completed the $1.5 billion acquisition of RightNow Technologies of Bozeman, Mt., which added to its customer relationship management modules. Last quarter, German arch-rival SAP announced plans to acquire HR software developer SuccessFactors for $3.4 billion. The acquisition of that San Mateo, Calif.-based rival of Taleo hasn't closed yet.

It look as if both Oracle and SAP have a twin-track strategy, said Tim Jennings, chief analyst with Ovum, a British consultancy. They both want to stake their claim with this software in the cloud market, he said in an interview.

Shares of Oracle closed up 16 cents at $28.89. Oracle has a market capitalization of $145.2 billion and reported cash and investments exceeding $31 billion in the second quarter ended Nov. 30.

Human capital management has become a strategic initiative for organizations, said Oracle Executive VP Thomas Kurian.

Shares of other human resources software companies such as Saba Software and Kenexa rose more than 2 percent on the Oracle-Taleo announcement.

Ovum's Jennings suggested at least one more player in the human resources software sector, Workday, the private Pleasanton, Calif.-based developer, might be snapped up by a larger company. Dave Duffield, who was CEO of PeopleSoft, founded Workday after the Oracle acquisition.