Salesforce.com 2008 Annual Report Download - page 30

Table of Contents
• potential unknown liabilities associated with the acquired businesses;
• unanticipated expenses related to acquired technology and its integration into existing technology;
• negative impact to our results of operations because of the depreciation and amortization of amounts related to acquired intangible assets, fixed
assets and deferred compensation, and the loss of acquired deferred revenue;
• delays in customer purchases due to uncertainty;
• the need to implement controls, procedures and policies appropriate for a public company at companies that prior to the acquisition lacked such
controls, procedures and policies; and
• challenges caused by distance, language and cultural differences.
In addition, if we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted which could affect the
market price of our stock. Further, if we fail to properly evaluate and execute acquisitions or investments, our business and prospects may be seriously harmed
and the value of our common stock may decline.
Our business is subject to changing regulations regarding corporate governance and public disclosure that have increased both our costs and the
risk of non-compliance.
We are subject to rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are
charged with the protection of investors and the oversight of companies whose securities are publicly traded. Our efforts to comply with new and changing
regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and
attention from revenue-generating activities to compliance activities.
We are required to comply on an on-going basis with the Sarbanes-Oxley Act, or SOX, requirements involving the assessment of our internal controls
over financial reporting. Our efforts to comply with the SOX requirements have required, and will continue to require the commitment of significant financial
and personnel resources.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new
guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing
revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, our business may be
harmed.
Unanticipated changes in our effective tax rate could adversely affect our future results.
We are subject to income taxes in the United States and various foreign jurisdictions, and our domestic and international tax liabilities are subject to the
allocation of expenses in differing jurisdictions.
Our effective tax rate has fluctuated over the past fiscal year. The tax rate is affected by changes in the mix of earnings and losses in countries with
differing statutory tax rates, certain non-deductible expenses arising from stock option compensation and the valuation of deferred tax assets and liabilities.
Increases in our effective tax rate could materially affect our net results.
Natural disasters and other events beyond our control could materially adversely affect us.
Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and
thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power shortages, and other events
beyond our
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