Salesforce.com 2009 Annual Report Download - page 25

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Table of Contents
and we intend to continue to expand our international sales efforts. The risks and challenges associated with sales to customers outside the United States
include:
• localization of our service, including translation into foreign languages and associated expenses;
• laws and business practices favoring local competitors;
• compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy and data protection
laws and regulations;
• treatment of revenue from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying
withholding income or other taxes in foreign jurisdictions;
• regional data privacy laws that apply to the transmission of our customers' data across international borders;
• foreign currency fluctuations and controls;
• different pricing environments;
• difficulties in staffing and managing foreign operations;
• different or lesser protection of our intellectual property;
• longer accounts receivable payment cycles and other collection difficulties;
• regional economic conditions; and
• regional political conditions.
Any of these factors could negatively impact our business and results of operations.
Additionally, our international subscription fees are paid either in U.S. dollars or local currency. As a result, fluctuations in the value of the U.S. dollar
and foreign currencies may make our service more expensive for international customers, which could harm our business.
Evolving regulation of the Internet may affect us adversely.
As Internet commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. For example, we believe
increased regulation is likely in the area of data privacy, and laws and regulations applying to the solicitation, collection, processing or use of personal or
consumer information could affect our customers' ability to use and share data, potentially reducing demand for CRM solutions and restricting our ability to
store, process and share data with our customers. In addition, taxation of services provided over the Internet or other charges imposed by government agencies
or by private organizations for accessing the Internet may also be imposed. Any regulation imposing greater fees for Internet use or restricting information
exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based services, which could harm our business.
Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our solution and adversely affect our business.
Our customers can use our service to store contact and other personal or identifying information regarding their customers and contacts. Federal, state
and foreign government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use and disclosure of
personal information obtained from consumers and individuals. The costs of compliance with, and other burdens imposed by, such laws and regulations that
are applicable to the businesses of our customers may limit the use and adoption of our service and reduce overall demand for it, or lead to significant fines,
penalties or liabilities for any noncompliance with such privacy laws. Furthermore, privacy concerns may cause our customers' customers to
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