Salesforce.com 2008 Annual Report Download - page 28

Table of Contents
Any of these factors could negatively impact our business and results of operations.
Additionally, some of our international subscription fees are currently paid in 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, however, 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. Furthermore,
privacy concerns may cause our customers' customers to resist providing the personal data necessary to allow our customers to use our service effectively.
Even the perception of privacy concerns, whether or not valid, may inhibit market adoption of our service in certain industries.
For example, in the United States regulations such as the Gramm-Leach-Bliley Act, which protects and restricts the use of consumer credit and
financial information, and the Health Insurance Portability and Accountability Act of 1996, which regulates the use and disclosure of personal health
information, impose significant requirements and obligations on businesses that may affect the use and adoption of our service.
The European Union has also adopted a data privacy directive that requires member states to impose restrictions on the collection and use of personal
data that, in some respects, are far more stringent, and impose more significant burdens on subject businesses, than current privacy standards in the United
States. All of these domestic and international legislative and regulatory initiatives may adversely affect our customers' ability to collect and/or use
demographic and personal information from their customers, which could reduce demand for our service. Many if not most other jurisdictions, including Asia
countries, have similar stringent privacy laws and regulations.
In addition to government activity, privacy advocacy groups and the technology and other industries are considering various new, additional or different
self-regulatory standards that may place additional burdens on us. If the gathering of personal information were to be curtailed in this manner, CRM solutions
would be less effective, which may reduce demand for our service and harm our business.
25