Friday, August 22, 2008

Article - Mounting Concerns Take the Shine Off

 A timely reality check for the sassiest of SaaS players

Shares of Inc. (CRM) dived more than 17% Thursday after second-quarter earnings highlighted growing headwinds for the company and analysts raised questions about its pricey valuation.

In a raft of research notes, analysts fretted over signs that revenue growth was slowing and volatile currency markets were affecting the company's performance. They also pointed to growing pressure from rivals and an acquisition whose immediate value is difficult to measure as reasons for caution.


Salesforce's stock has skyrocketed since the company went public in 2004. After initially pricing at $11, the company's shares peaked at more than $75 in June 2008. Investors liked - and continue to like - its business model. Salesforce allows customers to use software tools that are delivered online and stored on Salesforce's own servers. This approach allows customers to save money because they don't have to maintain the same level of computer infrastructure, and also speeds up the time it takes to get software up and running.

Source: Article -

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