Salesforce.com 2012 Annual Report Download - page 23

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established marketing relationships and access to larger customer bases, and have major distribution agreements
with consultants, system integrators and resellers.
As a result, our competitors may be able to respond more quickly and effectively than we can to new or
changing opportunities, technologies, standards or customer requirements. Furthermore, because of these
advantages, even if our service is more effective than the products that our competitors offer, potential customers
might accept competitive products and services in lieu of purchasing our service. For all of these reasons, we
may not be able to compete successfully against our current and future competitors.
As we acquire companies or technologies, they could prove difficult to integrate, disrupt our business,
dilute stockholder value and adversely affect our operating results and the value of your investment.
As part of our business strategy, we periodically make investments in, or acquisitions of, complementary
businesses, joint ventures, services and technologies and intellectual property rights, and we expect that we will
continue to make such investments and acquisitions in the future. Acquisitions and investments involve
numerous risks, including:
• the potential failure to achieve the expected benefits of the combination or acquisition;
• difficulties in and the cost of integrating operations, technologies, services and personnel;
• diversion of financial and managerial resources from existing operations;
• risk of entering new markets in which we have little or no experience or where competitors may have
stronger market positions;
• potential write-offs of acquired assets or investments, and potential financial and credit risks associated
with acquired customers;
• potential loss of key employees;
• inability to generate sufficient revenue to offset acquisition or investment costs;
• the inability to maintain relationships with customers and partners of the acquired business;
• the difficulty of incorporating acquired technology and rights into our products and services and of
maintaining the security standards consistent with our other services;
• 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 related to any acquisition;
• the need to implement controls, procedures and policies appropriate for a public company at private
companies that we acquire;
• challenges caused by distance, language and cultural differences; and
• the tax effects of any such acquisitions.
In addition, if we finance acquisitions by issuing equity or convertible or other debt securities, our existing
stockholders may be diluted or we could face constraints related to the terms of and repayment obligation related
to the incurrence of indebtedness which could affect the market price of our common 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 your investment may decline.
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