Enterprise cloud computing company, Salesforce.com has entered into a deal with social media platform provider, Buddy Media, to acquire their company and pay them almost $690 million in cash and common stock.
Salesforce.com hopes to have the acquisition of Buddy Media complete before the end of October this year.
Marc Benioff, chairman and CEO of salesforce.com comments on the acquisition of Buddy Media:
“Salesforce.com now has the number one players in social listening and marketing – Radian6 and Buddy Media,”
“With CMOs surpassing CIOs in spend on technology within the next five years, our Marketing Cloud leadership will allow us to capitalize on this massive opportunity.”
Michael Lazerow, co-founder and CEO Buddy Media comments on the power of joining with Salesforce.com:
“Buddy Media’s mission is to eliminate the current state of anarchy in social marketing,”
“With the Salesforce Marketing Cloud, marketers will be able to unify their efforts to better organize their teams, optimize their social programs and deliver real business results.”
Marcel LeBrun, SVP of Salesforce Radian6 also comments on the addition of Buddy Media’s unique addition to the Salesforce portfolio of solutions:
“Social media has caused the biggest transformation in marketing since the Mad Men era, causing CMOs to completely re-think their strategies,”
“By bringing together market leaders Radian6 and Buddy Media, we are doubling down on the Salesforce Marketing Cloud to provide CMOs with the ability to manage the entire social marketing lifecycle.”
Q2 FY13: Given an expected fiscal third quarter close date, this transaction is not expected to have any material impact to salesforce.com’s fiscal second quarter FY13 revenue or EPS results, previously guided on May 17, 2012.
Q3 FY13: Salesforce.com expects to provide revenue and EPS guidance for its fiscal third quarter FY13, including the effects of this transaction, when it announces results for its second fiscal quarter, ended July 31, 2012.
FY13: The acquisition is expected to increase revenues by approximately $20 million to $25 million, and to reduce non-GAAP EPS by approximately $0.14 to $0.15 in the second half of the year ending January 31, 2013 depending on the final acquisition date. To reflect the impact of this acquisition, the company is updating the full-year guidance it provided on May 17, 2012. Specifically, the company now expects FY13 revenue in the range of approximately $2.990 billion to $3.025 billion, and FY13 non-GAAP EPS in the range of approximately $1.45 to $1.49.
Non-GAAP EPS excludes the impact of the following non-cash items: stock-based compensation, amortization of purchased intangibles from acquisitions, and the amortization of debt discount on the company’s convertible senior notes, as well as the tax consequences associated with these items. The financial impact of the acquisition on a GAAP basis cannot be estimated until the allocation of the purchase price is completed following the closing of the acquisition. However, salesforce.com currently expects that the dilutive impact of the acquisition to EPS will be significantly greater on a GAAP basis than a non-GAAP basis.
Buddy media brings along social media marketing accounts from giants like Ford, Hewlett Packard, L’Oreal and Mattel. They currently serve over 1000 customers and provide campaigns on platforms like Twitter, Google, Facebook, YouTube, and Linkedin.
Last last week we brought you news of Nokia’s first-quarter earnings report. Despite additions to its Lumia line of smartphones, the company reported a $1.7 billion loss for the quarter.
Interestingly, although the iPhone is almost certainly one of the major culprits behind Nokia’s flagging sales, the iPhone also kept Nokia’s first quarter losses from being even greater. How is that, you ask? Last summer Nokia and Apple settled a lengthy patent war (much like the one currently raging between Apple and Samsung). As part of the agreement, Apple paid Nokia a one-time sum of about $600 million, and licensed the infringed patents from Nokia to the tune of €8 in royalties per iPhone sold. At current exchange rates, that works out to about $10.60 that Nokia made from the sale of every iPhone.
Now, while Nokia only sold 11.9 million smartphones in the first quarter, Apple sold a whopping 35.1 million smartphones, making Apple either the largest or second largest smartphone maker in the world, depending on who you ask. After a little quick math, it turns out that Nokia made $372 million from the sales of Apple’s iPhone between January 2012 and March 2012 (Nokia’s 1st quarter, Apple’s 2nd). Conversely, Nokia’s mobile phone division saw quarterly loss of €219 million ($290 million). In a nutshell, Nokia made $82 million more on iPhones than it lost on its own mobile phones.
The moral of the story, then, is that while patent lawsuits like the ones currently going between Apple and Samsung, Motorola and Microsoft, Motorola and Apple, etc. may look (and may be) ridiculous, they can make a huge difference to a company’s bottom line. In effect. The licensing agreement agreement between Nokia and Apple resulted in Nokia getting over a third of a billion dollars in free money last quarter. While that wasn’t enough to keep Nokia in the black, it did mean the difference between $1.7 billion in losses and over $2 billion in losses, and that’s nothing to sneeze at.
Salesforce.com is recognized as a leader in enterprise cloud -based computing and they have just announced a major deal that will bring many government agencies into the era of social network sharing. The contract will bring the latest social and mobile technologies to U.S. federal, state, and local agencies. It will provide a one-stop source where they can find, try and deploy cloud apps that meet their unique and different needs.
A major component of this deal is that Salesforce deliver the solutions in compliance with the Federal Information Security Management Act (FISMA). The deal propels these government agencies into the 21st century and allows them to stay up to date on innovations and upgrades in the data management and applications industry and do so without compromising security.
Vivek Kundra, executive vice president of emerging markets at Salesforce.Com comments on the deal:
“The bureaucracy of legacy government IT is preventing agencies from embracing innovative technologies that deliver immediate value,”
“We must end the era where government spends millions of dollars and waits years for IT projects that never work. Now, salesforce.com offers a solution the government needs to break down barriers to innovation and eliminate wasteful IT spending.”
John Conley, executive director of Colorado Statewide Internet Portal Authority also comments on the deal with Salesforc.com:
“We are committed to providing quality services that deliver value for Colorado taxpayers and simply make government work better,”
“Salesforce.com’s cloud technologies, including applications on AppExchange for Government, are helping us increase efficiency and provide a more responsive government that delights the constituents we serve.”
Michael Togyi, President and CEO of BasicGov, a provider of licensing, permitting and enforcement apps adds his sentiments about the partnership:
“AppExchange for Government provides a great opportunity to develop and deliver apps for government with the social, mobile and trusted capabilities of the Salesforce Platform,”
“We are excited to be one of the first partners to leverage the app marketplace to help our customers transform government for the social era.”
Dennis Wall, senior vice president at Cloud Sherpas adds to the sentiments:
“The social revolution represents an amazing opportunity for companies like ours to help government transform for the social era,”
“We’re excited about the Salesforce Government Partner Accelerator Program as we continue to build our business deploying salesforce.com’s social, mobile, and open cloud computing technologies.”
This looks like it is going to be a powerful asset for our government institutions. I think it has always been a problem for government to keep up with the fast paced technology sector, and this partnership will provide a valuable resource for our ruling body to draw from to that end. Once the these new tools are available, there will also need to be investments in training for people who should be aspiring to get the most mileage out of them.
Our ruling class is composed of many members who were around long before these advances and the new system might be met with some resistance. It will be interesting to see how it integrates into the way they do business.
AT&T just announced their first quarter financial report for their mobile business and things are looking pretty good. They added 726,000 new subscribers during the last three months and broke a record for first quarter smartphone sales with over 5.5 million devices activated. Interestingly, about 4.3 million of those were iPhones, which have been extremely popular at the carrier.
AT&T’s Chief Financial Officer, John Stephens comments on smartphone sales:
“We continue to set the pace in smartphone sales. We actually sold slightly more smartphones this quarter than a year ago, but our service margins were up significantly.”
Revenues for the quarter totaled $31.8 billion which is a 1.8% increase year-over-year. Operating expenses reached $25.7 billion versus $25.4 billion from Q1 2011. Operating income came in at just over $6 billion, up from $5.8 billion last quarter. The margin was also up from last quarter at 18.6% to 19.2%.
Total net income for Q1 2012 ended up at $3.6 billion which is $0.60 per diluted share and up from $0.57 from last quarter or $3.4 billion. Cash from operating activities reached $7.8 billion, but capital expenditures reached $4.3 billion as well-this left $3.5 billion. All and all, a pretty successful quarter.
Take a look at AT&T’s video on the Q1 2012 Financial results:
The company also experienced growth in their U-Verse TV and high speed internet subscriptions and reached a milestone 4 million users. Wireline industry also grew, however at a much slower rate. Unfortunately, prepaid mobile users fell to the lowest rate in seven years, but again, this is somewhat offset by their gains of over 726,000 wireless subscribers.
Though still highly dependent on their iPhone subscribers, it seems like AT&T is fairing pretty well in the mobile carrier battle and overall as a technology provider. They are still number two in the business, but it doesn’t look like they’ll be surpassing Verizon anytime soon.
Good news for college level students interested in math, science, engineering, and technology. Siemens Corporation, a global leader in electronics and electrical engineering, is offering summer internships to qualifying students. It’s is all in an effort to foster and develop talented individuals who can become viable Siemens candidates when they eventually graduate.
The internships last for three months during summer 2012, and provide valuable mentorships and networking opportunities. There are locations all over the United States who are looking to take on interns under the program.
Capable students who are interested in green building design, renewable energy, and healthcare and mobility are encouraged to apply. This program sends representatives to campus all over the country every year, but interested students can also click here to find out more and apply.
Mike Panigel, Chief Human Resources Officer for Siemens in the Americas comments on the summer programs:
“Siemens is committed to developing talent, both for our existing employees and by identifying and nurturing new entry level talent. We offer multiple internship programs across our businesses with a goal of converting the best candidates to full-time employees once they graduate,”
“Through this program we have an opportunity to get to know the candidates and they get to know Siemens – it enables all of us to make informed hiring decisions. The fresh ideas and enthusiasm of these new recruits are critical to the sustainability of the organization.”
If you have an education in Engineering, Finance, IT, Marketing, Operations, Procurements or Sales, or plan to get one, you should look into these opportunities. Experiences like Siemens offers here are invaluable and could provide a springboard for a lifetime of gainful and fulfilling employment.
Amazon, the largest online retailer in the UK, last year posted sales of more than $5.2 billion in that country, but didn’t pay any corporation tax on the profits, which prompted an investigation by Britain’s tax authorities.
Regulatory filings by Amazon US with the SEC show a tax inquiry into the company’s operation in the UK, where it sells about one in four books purchased, and focuses on a period when the British business was transferred to a company in Luxembourg. The SEC filings show that Amazon UK pulled in about $11 billion in sales over the past three years, without paying any corporate tax on the profits. Amazon’s tax affairs are presently being investigated in the US, China, Germany, France, Japan and Luxembourg.
Amazon launched in the UK in 1998, and remains that country’s most popular retail website, garnering more visitors than Argos, Next and Tesco, and was recently awarded for offering the best customer service in Britain. But Amazon.co.uk is technically not a British-owned company – in 2006, ownership went to Amazon EU Sarl in Luxembourg, and was classified as an “order fulfillment” company – all payments go to Luxembourg, and the UK operation is plainly a delivery service. In 2010, the Luxembourg office employed 134 workers with about $10 billion in turnover, compared to 2,256 employees in Britain, with $233 million in turnover.
According to the SEC filings, the Amazon taxable profit margin in the UK over the past three years falls between roughly $420 million and $570 million, which would accrue a UK corporation tax of up to $160 million. Still, between 2003 and 2011, Amazon UK has only registered a cumulative net tax bill of just $4.75 million, of which $3 million was incurred in 2011.
Amazon’s statement on the matter was this, “Amazon EU serves tens of millions of customers and sellers throughout Europe from multiple consumer websites in a number of languages, dispatching products to all 27 countries in the EU. We have a single European headquarters in Luxembourg with hundreds of employees to manage this complex operation.”
It’s clear that Amazon established operations in Luxembourg to avoid certain taxation, and admitted in their most recent SEC filing, “The effective tax rate in 2011, 2010, and 2009 was lower than the 35% US federal statutory rate primarily due to earnings of our subsidiaries outside of the US in jurisdictions where our effective tax rate is lower than in the US. Such earnings primarily relate to our European operations, which are headquartered in Luxembourg.”
As mentioned, Amazon is also under fire in the US, for not collecting any sales taxes on products sold in states where it does not have an office. It is speculated that Amazon only pays taxes in five states, and other states have tried to force changes.
After only a couple of years competing in US market, Dell has decided to discontinue smartphone sales. The computer giant began offering the touch-screen Aero smartphone in the later part of August 2010. The device was designed around Google’s Android operating system.
No official word has been issued on their decision to stop offering smartphones in the US market, but a recent interview with Amit Midha, president of Dell’s Asia-Pacific and Japan business, reveals that Dell has no intention of getting out of the manufacturing of the devices.
Midha comments:
“….But that doesn’t mean it is a PC versus smartphone versus tablet situation. Think about the different types of screens driving different behaviours to access and create information. So we are not saying that we are a PC company so that’s what we will do. We are so much more than a PC company. And we are absolutely focused on the smartphone and tablet as well. We are also seeing that netbook and tablet sales are offsetting each other. Also, people are carrying an additional device with the notebook—the tablet —but are not replacing it yet.”
Though Dell has asserted its focus on developments in all these areas, obviously it doesn’t mean they are a relevant competitor in every market. The success of iPhone, BlackBerry, and many Samsung and Motorola products in the US make for some pretty stiff competition. Perhaps their focus in the US should be different, which it seems is the case.
Midha expresses this sentiment:
“Today, half of our profitability comes from the enterprise and services side. Even though end-user solutions is half of our revenue we have more than half of our profitability coming from enterprise. As time progresses, more and more of our growth and profitability will come from non-end-user side. Even in that segment, our focus will be more on premium products.”
“…PCs are still growing, though at a slower rate than in the past. But the headlines are a little bit more sensational then we think the reality is. Because our customers tell us that some of the smartphone, tablet products they have used don’t work with printers well, there are security problems, privacy problems with them. But this is a good starting point. But how do you take the best out of that and bring into the corporate scenario.”
“We support the cloud platform, it is the best software and services opportunity for us, but we don’t think the current context of the tablet is ready for a corporate setting. We have made some of the announcements about a Windows 8 tablet. It connects with everything that the corporates have, it has privacy policies and gives IT (information technology) managers complete control.”
So we have some indications that Dell will be focusing more on the Enterprise end of their business, but still continuing to address the end-user side of the PC market. I am sure their tablet offerings will have more of an impact on the US market than their smartphones did.
Perhaps enterprise will slowly take over more of their business in 2012, but for now, we can expect Dell to continue to compete in the consumer side of things. I am curious if their are any Dell smartphone fans out there who are disappointed in the decision to withdraw from the US market.
As WebProNews previously reported, SalesCrunch has made an offer to Cisco to buy its web conferencing platform WebEx for $1 plus equity. SalesCrunch is primarily after WebEx’s userbase but believes the two companies “make sense.”
Check out our recent interview with SalesCrunch CEO and Founder Sean Black for all the details of the offer:
Although Black and SalesCrunch are confident that talks with Cisco will ensue, the networking giant indicates otherwise. In a statement released to WPN, Cisco said:
“This is a cute publicity stunt from SalesCrunch, and we appreciate that they like our technology, but we have no intention of selling Webex.”
This week, online meeting platform SalesCrunch made an offer to buy WebEx from Cisco. What’s interesting about the offer is the fact that it offered Cisco $1 plus a 15 percent stake in the new company.
For a little background information, WebEx is actually the first online meeting platform to be successful. In 2007, Cisco bought WebEx for $3.2 billion in an effort to break into the collaboration space. However, last year, the company said it was making cuts and narrowing its focus to its core business.
As a result of these developments, SalesCrunch began thinking about an acquisition of WebEx. Sean Black, the CEO and Founder of SalesCrunch, told WebProNews that the companies had talked several months ago but had not reached a deal. Now, in light of the recent events, he thinks the company may be more open to his offer.
“They’re increasingly paying attention to their shareholders and getting back to what is their core business,” he said. “It’s been long questioned that WebEx fit to that core switches and routers’ business – that’s, I think, why the offer makes so much sense.”
Black told us that, although WebEx was successful in its prime, the software was very outdated for today’s expectations. In other words, SalesCrunch wants WebEx for its userbase.
“What investors would like is to see them more focused on their core market, like routers, switches and data centers, and de-emphasize or even exit some of these consumer businesses.”
In a presentation he created that pitches the offer, Black also cites this statement from Michael Arrington, former founder and co-editor of TechCrunch, when he wrote about Cisco buying WebEx:
“Webex is still ubiquitous (I am asked to view a WebEx presentation almost daily), but it’s expensive and bulky. And if you aren’t on a newish Windows PC, there’s a good chance it isn’t going to work properly. WebEx is exactly the kind of a company that is being disrupted by new web startups, who are creating cheaper and better alternatives to older web applications.”
“[For Cisco,] the WebEx business just makes no sense at all,” said Black.
If Cisco does not accept his offer, he believes it will either kill the service or do nothing and allow it to continue to lose market share. He said both scenarios are bad since they could result in layoffs and, ultimately, a bad user experience.
On the other hand, Black believes a joint company would have a bright future. He told us that the users from WebEx combined with the modern browser-based platform from SalesCrunch that also integrates social networking, analysis, and other necessary elements would make a “really great next generation meeting platform.”
Although Black said he has received a lot of support for the offer, Colin Gillis, an analyst at BGC Partners, did raise some skepticism.
“Cash deals draw more serious attention, and this one is for $1. I don’t see them parting with WebEx anytime soon. The company’s clearly restructuring, but WebEx is not one that they have been telegraphing as up for sale.”
Black, however, remains confident that talks with Cisco will begin shortly.
Could SalesCrunch and WebEx provide a better service if they merged? Please comment.
Update: In a response to WebProNews, Cisco issued this statement:
“This is a cute publicity stunt from SalesCrunch, and we appreciate that they like our technology, but we have no intention of selling Webex.”
Consumers are demanding that more technology be integrated into their automobile’s, that is a well documented consumer desire, and Ford was listening when they set-out to revamp their model line-up for 2013. In fact, this isn’t new for Ford, they were the first to deliver integrated technology systems with their SYNC system many years ago.
What consumers can expect out of a new Ford automobile is integration. Ford’s number one focus is to keep driver’s eyes on the road without sacrificing their lifestyles. By streamlining conventional social media, navigation, and cell phone connectivity into the cockpits, they deliver safer, more user-friendly driving experiences.
Integration is made possible by collaborations with technology giants like Microsoft and Telenav.When drivers enter the vehicle, one of the first things they’ll notice is a full color touchscreen 8″ display that can be used to interface personally relevant infotainment.
You’ll be able to access app information stored on your smartphone, you’ll be able to access news, sports, weather forecasts, and the best thing is, most of it will be controlled via voice activation!
If you subscribe to Ford’s SYNC services, you will also be treated to a wide-array of business listing and a turn-by-turn map navigation system.
So if improved safety, more technology, and easier accessibility is what you crave, you owe it to yourself to check out what Ford has in store for new model buyers. I think it’s going to be impossible to fight the growing trend of communication technology and the distractions of having those devices present in the vehicle. The best thing manufacturers can do is create interfaces that keep our eyes on the road and attention on the streets.
I don’t think Ford is the only one capitalizing on current social media and communication trends, but they are the first to make it an explicit direction for the company. It’s a great idea and it looks like they did an outstanding job. Safety should always be one of manufacturer’s top priorities and it looks like Ford is delivering on that sentiment in a big way.
Yesterday many of us enjoyed coverage of Apple’sunveiling of the new iPad. But as we we gawked in amazement over the new device, officials at Chinese-based Proview devised yet another ploy to halt local iPad sales. The latest action comes from a state-run creditor claiming to own the rights to the iPad name.
The entity released an open letter to Chinese iPad retailers and vendors claiming that they will take legal action against any party who persists in the sale and distribution of any Apple branded iPad products. The Wall Street Journal China provides the following translation of the letter:
An open letter to China iPad vendors and dealers
Proview Technology (Shenzhen) is the legal registrant of the trademark “IPAD” (No. 1590557, registered with the trademark office of the State Administration for Industry and Commerce) and shall enjoy exclusive rights to use the trademark. In accordance with the Trademark Law of the People’s Republic of China, the use of a trademark that is identical with or similar to “IPAD” on goods or packaging by any entity or individual without our authorization shall constitute an infringement of our exclusive rights.
Although Apple Inc has filed an appeal following the rejection of its complaint about the registration of this trademark by the Shenzhen Intermediate Court, we (Proview Technology Shenzhen) remain the only legal holder of the trademark, and enjoy every right to prohibit another entity or individual from using the trademark.
In accordance with Article 52 of the Trademark Law and Article 50 of the Rules for Implementation of the Trademark Law, any of the following acts shall constitute an infringement of the exclusive right to use a registered trademark: “Deliberately providing convenient conditions for any act that infringes on another person’s right to exclusive use of a registered trademark whether through warehousing, transportation, shipment or concealment, etc.”
Additionally, Huizhou Intermediate Court in Guangdong Province and administrative authorities for industry and commerce in many cities have already produced rulings and determinations aimed at stopping several activities that infringe on our exclusive trademark rights.
Now we solemnly inform vendors and dealers (including e-distributorships) of Apple iPads (including the iPad 3) in China that they should immediately stop all infringing activities such as warehousing, transportation, mailing, concealing, etc. Any above activities shall be deemed as a deliberate infringement and we will, without prior notice, take the most severe measures possible to hold the infringers responsible for any legal liability, including but not limited to administrative, civil and criminal liabilities.
You are hereby informed!
Proview Technology Shenzhen March 7th, 2012
In case you aren’t up on the happening with Proview and Apple here’s a short video which addresses Apple’s options in the case:
We’ll keep you up to date on what actions come as a result of the letter’s release. According to Apple, their disputes with Proview have been settled, but this blatant action against the iPad manufacturer is a sign that this issue won’t die easily. Looks like things are really heating up.
Salesforce released its earnings report for fiscal Q4 and full-year 2011, beating most estimates.
Quarterly revenue was $632 Million, up 38% YoY. Full-year revenue was $2.27 Billion, up 37% YoY.
“Salesforce.com’s 38% revenue growth in the fourth quarter was a spectacular finish to our fiscal year, a year in which we delivered 37% revenue growth and added nearly 2,500 employees, including nearly 2,000 in the U.S.,” said CEO Marc Benioff. “Given the strong customer response to the social enterprise, we’re excited to raise our guidance today, which puts us on pace to exceed the $3 billion revenue run rate during FY13.”
Here’s the release in its entirety:
SAN FRANCISCO, Feb. 23, 2012 /PRNewswire/ — Salesforce.com (NYSE: CRM), the enterprise cloud computing (http://www.salesforce.com/cloudcomputing/) company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2012.
“Salesforce.com’s 38% revenue growth in the fourth quarter was a spectacular finish to our fiscal year, a year in which we delivered 37% revenue growth and added nearly 2,500 employees, including nearly 2,000 in the U.S.,” said Marc Benioff, Chairman and CEO, salesforce.com. “Given the strong customer response to the social enterprise, we’re excited to raise our guidance today, which puts us on pace to exceed the $3 billion revenue run rate during FY13.”
Salesforce.com delivered the following results for its fiscal fourth quarter:
Revenue: Total Q4 revenue was $632 million, an increase of 38% on a year-over-year basis. Subscription and support revenues were $594 million, an increase of 39% on a year-over-year basis. Professional services and other revenues were $38 million, an increase of 33% on a year-over-year basis.
For the full fiscal year 2012, the company reported revenue of $2.27 billion, an increase of 37% from the prior year. Subscription and support revenues were $2.13 billion, an increase of 37% on a year-over-year basis. Professional services and other revenues were $140 million, an increase of 32% on a year-over-year basis.
Earnings per Share: Q4 GAAP net loss per share was ($0.03), and non-GAAP diluted earnings per share was $0.43. The company’s non-GAAP results exclude the effects of approximately $70 million in stock-based compensation expense, approximately $20 million in amortization of purchased intangibles, and approximately $4 million in net non-cash interest expense related to the company’s convertible senior notes. Non-GAAP EPS calculations are based on approximately 142 million diluted shares outstanding during the quarter, including approximately 1.7 million shares associated with the company’s convertible senior notes. GAAP EPS calculations are based on a basic share count of approximately 137 million shares.
For the full fiscal year 2012, GAAP net loss per share was ($0.09), and non-GAAP diluted earnings per share was $1.36. The company’s non-GAAP results exclude the effects of approximately $229 million in stock-based compensation, approximately$67 million in amortization of purchased intangibles, and approximately $12 million in net non-cash interest expense related to the convertible senior notes. Non-GAAP EPS calculations are based on approximately 142 million diluted shares outstanding during the year, including approximately 2.8 million shares associated with the company’s convertible senior notes. GAAP EPS calculations are based on a basic share count of approximately 135 million shares.
Cash: Cash generated from operations for the fiscal fourth quarter was $240 million, an increase of 45% on a year-over-year basis. For the full fiscal year 2012, operating cash flow totaled $592 million, up 29% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at approximately $1.4 billion.
Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2012 was approximately $1.38 billion, an increase of 48% on a year-over-year basis. Current deferred revenue increased by 41% to approximately $1.29 billion, benefited in part by longer invoice durations. Long term deferred revenue increased by 309% to approximately $89 million. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the fiscal year at approximately $2.2 billion, up from approximately $1.5 billion at the end of fiscal 2011.
As of February 23, 2012, salesforce.com is initiating revenue and EPS guidance for its first quarter of fiscal year 2013, and initiating EPS guidance for its full fiscal year 2013. In addition, the company is raising its full fiscal year 2013 revenue guidance previously provided on November 17, 2011.
Q1 FY13 Guidance: Revenue for the company’s first fiscal quarter is projected to be in the range of $673 million to $678 million, an increase of 33% to 34%, year-over-year.
GAAP net loss per share is expected to be in the range of ($0.19) to ($0.18), while diluted non-GAAP EPS is expected to be in the range of $0.33 to $0.34. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $79 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $21 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $5 million. EPS estimates assume a GAAP tax rate of approximately 3%, and a non-GAAP tax rate of approximately 38%. For the purpose of the non-GAAP EPS calculation, assume an average fully diluted share count of approximately 145 million shares, and for the GAAP EPS calculation, assume an average basic share count of approximately 138 million shares.
Full Year FY13 Guidance: The company is raising its projected full fiscal year 2013 revenue from guidance previously provided on November 17, 2011. Revenue for the company’s full fiscal year 2013 is projected to be in the range of $2.92 billion to $2.95 billion, an increase of 29% to 30%, year-over-year.
For the company’s full fiscal year 2013, GAAP net loss per share is expected to be in the range of ($0.55) to ($0.51) while diluted non-GAAP EPS is expected to be in the range of $1.58 to $1.62. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $368 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $80 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $24 million. EPS estimates assume a GAAP tax rate of approximately 8%, and a non-GAAP tax rate of approximately 38%. For the purpose of the non-GAAP EPS calculation, assume an average fully diluted share count of approximately 149 million shares, and for the GAAP EPS calculation, assume an average basic share count of approximately 142 million shares.
The following is a per share reconciliation of GAAP EPS to non-GAAP diluted EPS guidance for the first quarter and full fiscal year:
Fiscal 2013
Q1
FY2013
GAAP EPS Range*
($0.19) – ($0.18)
($0.55) – ($0.51)
Plus
Amortization of purchased intangibles
$ 0.15
$ 0.54
Stock-based expense
$ 0.54
$ 2.47
Amortization of debt discount
$ 0.03
$ 0.16
Less
Income tax effect of certain Non-GAAP items
$ (0.20)
$ (1.04)
Non-GAAP diluted EPS
$0.33 – $0.34
$1.58 – $1.62
Shares used in computing basic net income per share (millions)
138
142
Shares used in computing diluted net income per share (millions)
145
149
* For Q1 & FY13 GAAP EPS loss, basic number of shares used for calculation
Quarterly Conference Call
Salesforce.com will host a conference call to discuss its fourth quarter fiscal year 2012 results at 2:00 p.m. Pacific Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company’s Investor Relations Web site at http://www.salesforce.com/investor. In addition, an archive of the webcast can be accessed through the same link. Participants who choose to call in to the conference call can do so by dialing domestically 866-901-SFDC or 866-901-7332 and internationally at +1 706-902-1764, passcode salesforce.com or 48589774. A replay will be available at 800-642-1687 or +1 706-645-9291, passcode 48589774, until midnight (Eastern Time) March 23, 2012.
About Salesforce.com
With 100,000+ customers, salesforce.com is the enterprise cloud computing company that is leading the shift to the social enterprise. Social enterprises leverage social, mobile and open cloud technologies to put customers at the heart of their business. Based on salesforce.com‘s real-time, multitenant architecture, the company’s platform and application services include:
Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices inEurope and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM.” For more information please visithttp://salesforce.com, or call 1-800-NO-SOFTWARE.
Non-GAAP Financial Measures: This press release includes information about non-GAAP EPS and non-GAAP tax rates (collectively the “non-GAAP financial measures”). Non-GAAP EPS estimates exclude the impact of the following non-cash items: stock-based compensation, amortization of acquisition-related intangibles, and the net amortization of debt discount on the company’s convertible senior notes, as well as the tax consequences associated with these items. The purpose of the non-GAAP tax rate is to quantify the excluded tax consequences of the excluded expense items. These non-GAAP estimates are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. The method used to produce non-GAAP financial measures is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.
The primary purpose of these non-GAAP measures is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash items on the company’s operating performance. Non-cash stock-based compensation, amortization of acquisition-related intangible assets, and the net amortization of debt discount on the company’s convertible senior notes are being excluded from the company’s FY12 financial results because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but were made for the company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue stock-based compensation, acquire a company, or issue convertible senior notes, are made to further the company’s long-term strategic objectives and impact the company’s income statement under GAAP measures, these items affect multiple periods and management is not able to change or affect these items in any particular period. As such, supplementing GAAP disclosure with non-GAAP disclosure using the non-GAAP measures provides management with an additional view of operational performance by excluding expenses that are not directly related to performance in any particular period, and management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the company’s performance.
In addition, the majority of the company’s industry peers report non-GAAP operating results that exclude certain non-cash or non-recurring items. Management believes that the provision of supplemental non-GAAP information will enable a more complete comparison of the company’s relative performance.
Specifically, management is excluding the following items from its non-GAAP EPS for Q4 and FY12 and its non-GAAP estimates for Q1 and FY13:
Stock-Based Expenses: The company’s compensation strategy includes the use of stock-based compensation to attract and retain employees and executives. It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than to motivate or reward operational performance for any particular period. Thus, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.
Amortization of Purchased Intangibles: The company views amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, customer lists and customer relationships, as items arising from pre-acquisition activities determined at the time of an acquisition. While it is continually viewed for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.
Amortization of Debt Discount: Under GAAP, certain convertible debt instruments that may be settled in cash (or other assets) on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, for GAAP purposes we are required to recognize imputed interest expense on the company’s $575 million of convertible subordinated notes that were issued in a private placement in January 2010. The imputed interest rate is approximately 5.9%, while the coupon interest rate is 0.75%. The difference between the imputed interest expense and the coupon interest expense, net of the interest amount capitalized, is excluded from management’s assessment of the company’s operating performance because management believes that this non-cash expense is not indicative of ongoing operating performance. Management believes that the exclusion of the non-cash interest expense provides investors an enhanced view of the company’s operational performance.
Income Tax Effects: The company’s estimated non-GAAP effective tax rate is lower than the estimated GAAP effective tax rate due to the exclusion of the expense items described above.
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected GAAP revenue and GAAP and non-GAAP EPS for the first fiscal quarter of 2013 and the full fiscal year, the company’s expected revenue run rate and revenues in fiscal 2013, the company’s expected tax rates, stock-based compensation expenses, amortization of purchased intangibles and debt discount, and shares outstanding. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements we make.
The risks and uncertainties referred to above include – but are not limited to – risks associated with possible fluctuations in the company’s financial and operating results; the company’s rate of growth and anticipated revenue run rate, including the company’s ability to convert deferred revenue and unbilled deferred revenue into revenue and, as appropriate, cash flow, and the continued growth and ability to maintain deferred revenue and unbilled deferred revenue; errors, interruptions or delays in the company’s service or the company’s Web hosting; breaches of the company’s security measures; the financial impact of any previous and future acquisitions; the nature of the company’s business model; the company’s ability to continue to release, and gain customer acceptance of, new and improved versions of the company’s service; successful customer deployment and utilization of the company’s existing and future services; changes in the company’s sales cycle; competition; various financial aspects of the company’s subscription model; unexpected increases in attrition or decreases in new business; the emerging markets in which we operate; unique aspects of entering or expanding in international markets, the company’s ability to hire, retain and motivate employees and manage the company’s growth; changes in the company’s customer base; technological developments; regulatory developments; litigation related to intellectual property and other matters, and any related claims, negotiations and settlements; unanticipated changes in the company’s effective tax rate; fluctuations in the number of shares we have outstanding and the price of such shares; foreign currency exchange rates; collection of receivables; interest rates; the company’s plans to build and expand its campus in San Francisco, California and the associated costs; and general developments in the economy, financial markets, and credit markets.
Further information on these and other factors that could affect the company’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including the company’s Form 10-K that will be filed for the fiscal year ended January 31, 2012. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at www.salesforce.com/investor.
Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Income (loss) before benefit (provision) for income taxes and noncontrolling interest
(7,535)
4,379
(33,317)
104,298
Benefit (provision) for income taxes
3,457
6,491
21,745
(34,601)
Consolidated net income (loss)
(4,078)
10,870
(11,572)
69,697
Less: Net loss attributable to noncontrolling interest
0
43
0
(5,223)
Net income (loss) attributable to salesforce.com
$ (4,078)
$ 10,913
$ (11,572)
$ 64,474
Basic net income (loss) per share attributable to salesforce.com common shareholders
$ (0.03)
$ 0.08
$ (0.09)
$ 0.50
Diluted net income (loss) per share attributable to salesforce.com common shareholders
$ (0.03)
$ 0.08
$ (0.09)
$ 0.47
Shares used in computing basic net income (loss) per share
136,720
132,344
135,302
130,222
Shares used in computing diluted net income (loss) per share
136,720
140,199
135,302
136,598
(1) Amounts include amortization of purchased intangibles from business combinations, as follows:
Cost of revenues
$ 17,132
$ 5,721
$ 60,069
$ 15,459
Marketing and sales
2,751
1,146
7,250
4,209
(2) Amounts include stock-based expenses, as follows:
Cost of revenues
$ 5,283
$ 3,541
$ 17,451
$ 12,158
Research and development
14,670
6,778
45,894
18,897
Marketing and sales
35,706
19,955
115,730
56,451
General and administrative
14,441
11,440
50,183
32,923
salesforce.com, inc.
Condensed Consolidated Statements of Operations
As a percentage of total revenues:
(Unaudited)
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Revenues:
Subscription and support
94%
94%
94%
94%
Professional services and other
6
6
6
6
Total revenues
100
100
100
100
Cost of revenues (1)(2):
Subscription and support
16
13
16
13
Professional services and other
6
7
6
7
Total cost of revenues
22
20
22
20
Gross profit
78
80
78
80
Operating expenses (1)(2):
Research and development
12
13
13
11
Marketing and sales
52
51
52
48
General and administrative
15
16
15
15
Total operating expenses
79
80
80
74
Income (loss) from operations
(1)
0
(2)
6
Investment income
1
2
1
2
Interest expense
(1)
(1)
(1)
(2)
Other expense
0
0
0
0
Income (loss) before benefit (provision) for income taxes and noncontrolling interest
(1)
1
(2)
6
Benefit (provision) for income taxes
0
1
1
(2)
Consolidated net income (loss)
(1)
2
(1)
4
Less: Net loss attributable to noncontrolling interest
0
0
0
0
Net income (loss) attributable to salesforce.com
(1%)
2%
(1%)
4%
(1) Amortization of purchased intangibles from business combinations as a percentage of total revenues, as follows:
Cost of revenues
3%
1%
3%
1%
Marketing and sales
0
0
0
0
(2) Stock-based expenses as a percentage of total revenues, as follows:
Cost of revenues
1%
1%
1%
1%
Research and development
2
1
2
1
Marketing and sales
6
4
5
3
General and administrative
2
3
2
2
salesforce.com, inc.
Condensed Consolidated Balance Sheets
(in thousands)
January 31,
January 31,
2012
2011
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$ 607,284
$ 424,292
Short-term marketable securities
170,582
72,678
Accounts receivable, net
683,745
426,943
Deferred commissions
98,471
67,774
Deferred income taxes
31,821
27,516
Prepaid expenses and other current assets (see additional metrics)
80,319
55,721
Total current assets
1,672,222
1,074,924
Marketable securities, noncurrent
669,308
910,587
Property and equipment, net (see additional metrics)
527,946
387,174
Deferred commissions, noncurrent
78,149
48,842
Deferred income taxes, noncurrent
87,587
41,199
Capitalized software, net (see additional metrics)
188,412
127,987
Goodwill
785,381
396,081
Other assets, net (see additional metrics)
155,149
104,371
Total assets
$ 4,164,154
$ 3,091,165
Liabilities, temporary equity and stockholders’ equity
Current liabilities:
Accounts payable
$ 33,258
$ 18,106
Accrued expenses and other liabilities (see additional metrics)
502,442
345,121
Deferred revenue
1,291,622
913,239
Convertible senior notes, net
496,149
0
Total current liabilities
2,323,471
1,276,466
Convertible senior notes, net
0
472,538
Income taxes payable, noncurrent
37,258
18,481
Long-term lease liabilities and other
48,651
25,487
Deferred revenue, noncurrent
88,673
21,702
Total liabilities
2,498,053
1,814,674
Temporary equity
78,741
0
Stockholders’ equity:
Common stock
137
133
Additional paid-in capital
1,415,077
1,098,604
Accumulated other comprehensive income
12,683
6,719
Retained earnings
159,463
171,035
Total stockholders’ equity
1,587,360
1,276,491
Total liabilities, temporary equity and stockholders’ equity
$ 4,164,154
$ 3,091,165
salesforce.com, inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Operating activities:
Consolidated net income (loss)
$ (4,078)
$ 10,870
$ (11,572)
$ 69,697
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization
45,901
23,738
157,286
75,746
Amortization of debt discount and transaction costs
3,877
1,982
10,347
19,621
Amortization of deferred commissions
30,742
22,605
107,195
80,159
Expenses related to stock-based awards
70,100
41,714
229,258
120,429
Excess tax benefits from employee stock plans
4,994
10,777
(6,018)
(35,991)
Changes in assets and liabilities:
Accounts receivable, net
(365,099)
(169,833)
(244,947)
(102,507)
Deferred commissions
(86,947)
(56,004)
(167,199)
(121,247)
Prepaid expenses and other current assets
(777)
8,464
(10,736)
2,001
Other assets
2,816
(365)
2,883
(9,770)
Accounts payable
3,716
(5,254)
12,644
1,246
Accrued expenses and other current liabilities
72,628
36,684
67,692
132,004
Deferred revenue
462,474
240,384
444,674
227,693
Net cash provided by operating activities
240,347
165,762
591,507
459,081
Investing activities:
Business combinations, net of cash acquired
(57,914)
(247,994)
(422,699)
(403,331)
Land activity and building improvements
(6,565)
(269,944)
(19,655)
(277,944)
Strategic investments
(2,647)
(13,605)
(37,370)
(20,105)
Changes in marketable securities
(45,608)
179,346
141,679
(270,287)
Capital expenditures
(44,602)
(30,576)
(151,645)
(90,887)
Net cash used in investing activities
(157,336)
(382,773)
(489,690)
(1,062,554)
Financing activities:
Purchase of subsidiary stock
0
(19,721)
0
(171,964)
Proceeds from equity plans
26,203
44,406
116,565
160,402
Excess tax benefits from employee stock plans
(4,994)
(10,777)
6,018
35,991
Contingent consideration payment related to prior business combinations
0
0
(16,200)
0
Principal payments on capital lease obligations
(8,737)
(3,198)
(30,533)
(10,355)
Net cash provided by financing activities
12,472
10,710
75,850
14,074
Effect of exchange rate changes
8,814
290
5,325
2,385
Net increase (decrease) in cash and
cash equivalents
104,297
(206,011)
182,992
(587,014)
Cash and cash equivalents, beginning of period
502,987
630,303
424,292
1,011,306
Cash and cash equivalents, end of period
$ 607,284
$ 424,292
$ 607,284
$ 424,292
salesforce.com, inc.
Additional Metrics
(Unaudited)
Jan 31,
Oct 31,
Jul 31,
Apr 30,
Jan 31,
Oct 31,
2012
2011
2011
2011
2011
2010
Full Time Equivalent Headcount
7,785
6,953
6,352
5,513
5,306
4,758
Financial data (in thousands):
Cash, cash equivalents and marketable securities
$ 1,447,174
$ 1,296,693
$ 1,286,658
$ 1,522,285
$ 1,407,557
$ 1,802,440
Deferred revenue, current and noncurrent
$ 1,380,295
$ 917,821
$ 935,266
$ 915,133
$ 934,941
$ 694,557
Selected Balance Sheet Accounts (in thousands):
Jan 31,
Oct 31,
Jan 31,
2012
2011
2011
Prepaid Expenses and Other Current Assets
Deferred professional services costs
$ 10,399
$ 13,563
$ 17,908
Prepaid income taxes
12,785
13,137
720
Prepaid expenses and other current assets
57,135
52,728
37,093
$ 80,319
$ 79,428
$ 55,721
Property and Equipment, net
Land
$ 248,263
$ 248,263
$ 248,263
Building improvements
43,868
34,974
10,115
Computers, equipment and software
232,460
223,288
115,736
Furniture and fixtures
25,250
24,622
20,462
Leasehold improvements
137,587
125,838
100,380
687,428
656,985
494,956
Less accumulated depreciation and amortization
(159,482)
(152,158)
(107,782)
$ 527,946
$ 504,827
$ 387,174
Capitalized Software, net
Capitalized internal-use software development costs, net of accumulated amortization
$ 41,442
$ 35,475
$ 29,154
Acquired developed technology, net of accumulated amortization
146,970
163,938
98,833
$ 188,412
$ 199,413
$ 127,987
Other Assets, net
Deferred professional services costs, noncurrent portion
$ 3,935
$ 5,707
$ 10,201
Long-term deposits
13,941
13,887
12,114
Purchased intangible assets, net of accumulated amortization
46,110
45,410
31,660
Acquired intellectual property, net of accumulated amortization
15,020
13,895
5,874
Strategic investments
53,949
55,035
27,065
Other
22,194
22,484
17,457
$ 155,149
$ 156,418
$ 104,371
Accrued Expenses and Other Current Liabilities
Accrued compensation
$ 228,466
$ 145,116
$ 148,275
Accrued other liabilities
121,957
134,741
112,840
Accrued income and other taxes payable
100,471
78,819
49,135
Accrued professional costs
21,993
22,836
12,548
Accrued rent
29,555
27,638
22,323
$ 502,442
$ 409,150
$ 345,121
Selected Off-Balance Sheet Accounts
Unbilled Deferred Revenue, a non-GAAP measure
Unbilled deferred revenue was approximately $2.2 billion as of January 31, 2012 and $1.5 billion as of January 31, 2011. Unbilled deferred revenue represents future billings under our non-cancelable subscription agreements that have not been invoiced and, accordingly, are not recorded in deferred revenue.
Supplemental Revenue Analysis
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Revenues by geography (in thousands):
Americas
$ 436,237
$ 308,526
$ 1,540,289
$ 1,135,019
Europe
108,141
82,933
408,456
291,784
Asia Pacific
87,535
65,408
317,794
230,336
$ 631,913
$ 456,867
$ 2,266,539
$ 1,657,139
As a percentage of total revenues:
Revenues by geography:
Americas
69
%
68
%
68
%
68
%
Europe
17
18
18
18
Asia Pacific
14
14
14
14
100
%
100
%
100
%
100
%
Three Months Ended
Three Months Ended
Three Months Ended
January 31, 2012
October 31, 2011
January 31, 2011
compared to Three Months
compared to Three Months
compared to Three Months
Ended January 31, 2011
Ended October 31, 2010
Ended January 31, 2010
Revenue constant currency growth rates (as compared to the comparable prior periods)
Americas
41%
36%
26%
Europe
32%
29%
41%
Asia Pacific
28%
31%
35%
Total growth
38%
34%
30%
We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect at the end of each quarter for growth rate calculations presented, rather than the actual exchange rates in effect during that period.
Supplemental Diluted Sharecount Information
(in thousands)
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Weighted-average shares outstanding for basic earnings per share
136,720
132,344
135,302
130,222
Effect of dilutive securities (1):
Convertible senior notes
1,700
2,421
2,263
1,561
Warrants associated with the convertible senior note hedges
0
696
553
0
Employee stock awards
3,407
4,738
4,177
4,815
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share
141,827
140,199
142,295
136,598
(1)
The effects of these dilutive securities were not included in the GAAP calculation of diluted earnings/loss per share for the three and twelve months ended January 31, 2012 because the effect would have been anti-dilutive.
Supplemental Cash Flow Information
Free cash flow analysis, a non-GAAP measure
(in thousands)
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Operating cash flow-
GAAP net cash provided by operating activities
$ 240,347
$ 165,762
$ 591,507
$ 459,081
Less:
Capital expenditures
(44,602)
(30,576)
(151,645)
(90,887)
Free cash flow
$ 195,745
$ 135,186
$ 439,862
$ 368,194
Our free cash flow analysis includes GAAP net cash provided by operating activities less capital expenditures. The capital expenditures balance does not include any costs related to the purchase and activities related to the building of our campus and strategic investments.
salesforce.com, inc.
GAAP RESULTS RECONCILED TO NON-GAAP RESULTS
The following table reflects selected salesforce.com GAAP results reconciled to non-GAAP results
(in thousands, except per share data)
(Unaudited)
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Gross profit
GAAP gross profit
$ 495,568
$ 364,556
$ 1,777,653
$ 1,333,326
Plus:
Amortization of purchased intangibles (b)
17,132
5,721
60,069
15,459
Stock-based expenses (c)
5,283
3,541
17,451
12,158
Non-GAAP gross profit
$ 517,983
$ 373,818
$ 1,855,173
$ 1,360,943
Operating expenses
GAAP operating expenses
$ 501,945
$ 364,947
$ 1,812,738
$ 1,235,829
Less:
Amortization of purchased intangibles (b)
(2,751)
(1,146)
(7,250)
(4,209)
Stock-based expenses (c)
(64,817)
(38,173)
(211,807)
(108,271)
Non-GAAP operating expenses
$ 434,377
$ 325,628
$ 1,593,681
$ 1,123,349
Income from operations
GAAP income (loss) from operations
$ (6,377)
$ (391)
$ (35,085)
$ 97,497
Plus:
Amortization of purchased intangibles (b)
19,883
6,867
67,319
19,668
Stock-based expenses (c)
70,100
41,714
229,258
120,429
Non-GAAP income from operations
$ 83,606
$ 48,190
$ 261,492
$ 237,594
Non-operating income (a)
GAAP non-operating income (loss)
$ (1,158)
$ 4,770
$ 1,768
$ 6,801
Plus: Amortization of debt discount, net
4,144
2,430
12,335
19,079
Non-GAAP non-operating income
$ 2,986
$ 7,200
$ 14,103
$ 25,880
Net income attributable to salesforce.com
GAAP net income (loss) attributable to salesforce.com
$ (4,078)
$ 10,913
$ (11,572)
$ 64,474
Plus:
Amortization of purchased intangibles
19,883
6,867
67,319
19,668
Stock-based expenses
70,100
41,714
229,258
120,429
Amortization of debt discount, net
4,144
2,430
12,335
19,079
Less:
Income tax effect of Non-GAAP items
(28,419)
(18,854)
(103,730)
(57,544)
Non-GAAP net income attributable to salesforce.com
$ 61,630
$ 43,070
$ 193,610
$ 166,106
Diluted earnings per share
GAAP diluted earnings (loss) per share (d)
$ (0.03)
$ 0.08
$ (0.09)
$ 0.47
Plus:
Amortization of purchased intangibles
0.14
0.05
0.47
0.14
Stock-based expenses
0.49
0.30
1.62
0.88
Amortization of debt discount, net
0.03
0.01
0.09
0.14
Less:
Income tax effect of Non-GAAP items
(0.20)
(0.13)
(0.73)
(0.41)
Non-GAAP diluted earnings per share attributable to salesforce.com
$ 0.43
$ 0.31
$ 1.36
$ 1.22
Shares used in computing diluted net income per share
141,827
140,199
142,295
136,598
a)
Non-operating income consists of investment income, interest expense and other income (expense)
b)
Amortization of purchased intangibles were as follows:
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Cost of revenues
$ 17,132
$ 5,721
$ 60,069
$ 15,459
Marketing and sales
2,751
1,146
7,250
4,209
$ 19,883
$ 6,867
$ 67,319
$ 19,668
c)
Stock-based expenses were as follows:
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Cost of revenues
$ 5,283
$ 3,541
$ 17,451
$ 12,158
Research and development
14,670
6,778
45,894
18,897
Marketing and sales
35,706
19,955
115,730
56,451
General and administrative
14,441
11,440
50,183
32,923
$ 70,100
$ 41,714
$ 229,258
$ 120,429
d)
Reported GAAP loss per share was calculated using the basic share count.
Non-GAAP diluted earnings per share was calculated using the diluted share count.
salesforce.com, inc.
COMPUTATION OF BASIC AND DILUTED GAAP AND NON-GAAP NET INCOME (LOSS) PER SHARE
(in thousands, except per share data)
(Unaudited)
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
GAAP Basic Net Income (loss) Per Share
Net income (loss) attributable to salesforce.com
$ (4,078)
$ 10,913
$ (11,572)
$ 64,474
Basic net income (loss) per share attributable to salesforce.com common stockholders
(0.03)
0.08
(0.09)
0.50
Shares used in computing basic net income (loss) per share attributable to salesforce.com common stockholders
136,720
132,344
135,302
130,222
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Non-GAAP Basic Net Income Per Share
Non-GAAP net income attributable to salesforce.com
$ 61,630
$ 43,070
$ 193,610
$ 166,106
Basic Non-GAAP net income per share attributable to salesforce.com common stockholders
0.45
0.33
1.43
1.28
Shares used in computing basic net income per share attributable to salesforce.com common stockholders
136,720
132,344
135,302
130,222
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
GAAP Diluted Net Income (loss) Per Share
Net income (loss) attributable to salesforce.com
$ (4,078)
$ 10,913
$ (11,572)
$ 64,474
Diluted net income (loss) per share attributable to salesforce.com common stockholders
(0.03)
0.08
(0.09)
0.47
Shares used in computing diluted net income (loss) per share attributable to salesforce.com common stockholders
136,720
140,199
135,302
136,598
Three Months Ended January 31,
Fiscal Year Ended January 31,
2012
2011
2012
2011
Non-GAAP Diluted Net Income Per Share
Non-GAAP net income attributable to salesforce.com
$ 61,630
$ 43,070
$ 193,610
$ 166,106
Diluted Non-GAAP net income per share attributable to salesforce.com common stockholders
0.43
0.31
1.36
1.22
Shares used in computing diluted net income per share attributable to salesforce.com common stockholders
Amazon just released its earnings report for the fourth quarter. This includes an increase in net sales of 35% to $17.43 billion. Still, net income decreased 58% to $177 million for the quarter.
Kindle unit sales (including Kindles and Kindle Fires) increased 177% over the same period last year.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said CEO Jeff Bezos.
Below is the release in its entirety:
SEATTLE–(BUSINESS WIRE)–Jan. 31, 2012– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its fourth quarter ended December 31, 2011.
Operating cash flow increased 12% to $3.90 billion for the trailing twelve months, compared with $3.50billion for the trailing twelve months ended December 31, 2010. Free cash flow decreased 17% to $2.09 billion for the trailing twelve months, compared with $2.52 billion for the trailing twelve months ended December 31, 2010.
Common shares outstanding plus shares underlying stock-based awards totaled 468 million on December 31, 2011, compared with 465 million a year ago.
Net sales increased 35% to $17.43 billion in the fourth quarter, compared with $12.95 billion in fourth quarter 2010. Excluding the $101 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 34% compared with fourth quarter 2010.
Operating income was $260 million in the fourth quarter, compared with $474 million in fourth quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $5 million.
Net income decreased 58% to $177 million in the fourth quarter, or $0.38 per diluted share, compared with net income of $416 million, or $0.91 per diluted share, in fourth quarter 2010.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Jeff Bezos, founder and CEO of Amazon.com. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”
Full Year 2011
Net sales increased 41% to $48.08 billion, compared with $34.20 billion in 2010. Excluding the $1.09 billionfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales would have grown 37% compared with 2010.
Operating income decreased 39% to $862 million, compared with $1.41 billion in 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $53 million.
Net income decreased 45% to $631 million in 2011, or $1.37 per diluted share, compared with net income of$1.15 billion, or $2.53 per diluted share, in 2010.
Highlights
During the nine-week holiday period ending December 31, 2011, Kindle unit sales, including both the Kindle Fire and e-reader devices, increased 177% over the same period last year.
Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 17 weeks ago.
Amazon launched Kindle Stores at Amazon.it and Amazon.es. Kindle moved to the top of the bestseller list on launch day in both countries and held the top spot this holiday season. The new Kindle was also the bestselling product on Amazon.co.uk, Amazon.de and Amazon.fr.
Amazon.com announced the Kindle Owners’ Lending Library, a benefit of Prime membership that offers over 80,000 books to borrow for free – including over 100 current and former New York Times bestsellers – as frequently as a book a month, with no due dates.
Kindle Direct Publishing (KDP) announced KDP Select, an annual fund of at least $6 million dedicated to independent authors and publishers who participate in the Kindle Owners’ Lending Library. In December alone, customers borrowed 295,000 KDP Select titles, and KDP Select has helped grow the total library selection of books by over 16X.
Amazon continued to expand its catalog of title offerings for Prime Instant Video, announcing licensing agreements with Twentieth Century Fox Television Distribution, which added the popular FOX and FX television shows Glee and Sons of Anarchy, and Disney-ABC Television, which added popular television shows including Lost and Grey’s Anatomy. These deals bring the total number of Prime Instant Videos to more than 13,000 movies and TV shows from partners such as CBS, Fox, NBCUniversal, Sony, Warner Bros., PBS, ABC-Disney and many more.
The number of videos purchased or rented from Amazon Instant Video and the number of Amazon Instant Video customers both more than doubled year-over-year in the fourth quarter. In addition, the number of Prime Instant Video streams increased nearly 300% in the fourth quarter compared to the third quarter.
Amazon Appstore for Android customers nearly tripled in the fourth quarter compared to the third quarter. In addition, customers downloaded more apps from the Amazon Appstore during the fourth quarter than they had during all previous quarters combined.
North America segment sales, representing the Company’s U.S. and Canadian sites, were $9.90 billion, up 37% from fourth quarter 2010.
International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $7.53 billion, up 31% from fourth quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 29%.
Worldwide Media sales grew 15% to $6.01 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 14%.
Worldwide Electronics and Other General Merchandise sales grew 48% to $10.91 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 47%.
Amazon Web Services (AWS) announced the launch of its new South America (Sao Paulo) Region and U.S. West (Oregon) Region, bringing the total to eight geographic regions worldwide to which the company has deployed its global cloud computing services.
AWS announced the launch of Amazon DynamoDB, a fully managed NoSQL database service that provides extremely fast and predictable performance with seamless scalability. With a few clicks in the AWS Management Console, customers can launch a new Amazon DynamoDB database table, scale up or down their request capacity for the table without downtime or performance degradation, and gain visibility into resource utilization and performance metrics.
AWS announced that customers can now run their Microsoft Windows Server applications within the AWS Free Usage Tier – a program designed to help new AWS customers get started in the cloud. Developers and businesses with Windows Server applications can take advantage of 750 hours of Amazon Elastic Compute Cloud (Amazon EC2) Micro Instance usage per month, at no charge for a one-year period.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of January 31, 2012. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.
First Quarter 2012 Guidance
Net sales are expected to be between $12.0 billion and $13.4 billion, or to grow between 22% and 36% compared with first quarter 2011.
Operating income (loss) is expected to be between $(200) million and $100 million, or between 162% decline and 69% decline compared with first quarter 2011.
This guidance includes approximately $200 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.
A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.
These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.
Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.
About Amazon.com
Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.
Amazon and its affiliates operate websites… As used herein, “Amazon.com,” “we,” “our” and similar terms includeAmazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.
AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
2,823
$
1,539
$
3,777
$
3,444
OPERATING ACTIVITIES:
Net income
177
416
631
1,152
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of fixed assets, including internal-use software and website development, and other amortization
359
170
1,083
568
Stock-based compensation
159
120
557
424
Other operating expense (income), net
43
29
154
106
Losses (gains) on sales of marketable securities, net
–
–
(4
)
(2
)
Other expense (income), net
(16
)
(17
)
(56
)
(79
)
Deferred income taxes
67
48
136
4
Excess tax benefits from stock-based compensation
(1
)
(23
)
(62
)
(259
)
Changes in operating assets and liabilities:
Inventories
(1,260
)
(693
)
(1,777
)
(1,019
)
Accounts receivable, net and other
(1,077
)
(531
)
(866
)
(295
)
Accounts payable
4,684
3,442
2,997
2,373
Accrued expenses and other
1,076
596
1,067
740
Additions to unearned revenue
358
186
1,064
687
Amortization of previously unearned revenue
(300
)
(263
)
(1,021
)
(905
)
Net cash provided by (used in) operating activities
4,269
3,480
3,903
3,495
INVESTING ACTIVITIES:
Purchases of fixed assets, including internal-use software and website development
(550
)
(328
)
(1,811
)
(979
)
Acquisitions, net of cash acquired, and other
(49
)
(271
)
(705
)
(352
)
Sales and maturities of marketable securities and other investments
912
1,112
6,843
4,250
Purchases of marketable securities and other investments
(1,782
)
(1,728
)
(6,257
)
(6,279
)
Net cash provided by (used in) investing activities
(1,469
)
(1,215
)
(1,930
)
(3,360
)
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation
1
23
62
259
Common stock repurchased
(277
)
–
(277
)
–
Proceeds from long-term debt and other
47
43
177
143
Repayments of long-term debt, capital lease, and finance lease obligations
(104
)
(100
)
(444
)
(221
)
Net cash provided by (used in) financing activities
(333
)
(34
)
(482
)
181
Foreign-currency effect on cash and cash equivalents
(21
)
7
1
17
Net increase (decrease) in cash and cash equivalents
2,446
2,238
1,492
333
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
5,269
$
3,777
$
5,269
$
3,777
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long term debt
$
4
$
3
$
14
$
11
Cash paid for income taxes (net of refunds)
15
13
33
75
Fixed assets acquired under capital leases
187
122
753
405
Fixed assets acquired under build-to-suit leases
39
14
259
172
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
Product sales
$
15,309
$
11,729
$
42,000
$
30,792
Services sales
2,122
1,219
6,077
3,412
Net sales
17,431
12,948
48,077
34,204
Operating expenses (1):
Cost of sales
13,830
10,317
37,288
26,561
Fulfillment
1,659
1,090
4,576
2,898
Marketing
593
376
1,630
1,029
Technology and content
862
519
2,909
1,734
General and administrative
184
143
658
470
Other operating expense (income), net
43
29
154
106
Total operating expenses
17,171
12,474
47,215
32,798
Income from operations
260
474
862
1,406
Interest income
14
14
61
51
Interest expense
(20
)
(11
)
(65
)
(39
)
Other income (expense), net
19
29
76
79
Total non-operating income (expense)
13
32
72
91
Income before income taxes
273
506
934
1,497
Provision for income taxes
(86
)
(84
)
(291
)
(352
)
Equity-method investment activity, net of tax
(10
)
(6
)
(12
)
7
Net income
$
177
$
416
$
631
$
1,152
Basic earnings per share
$
0.39
$
0.93
$
1.39
$
2.58
Diluted earnings per share
$
0.38
$
0.91
$
1.37
$
2.53
Weighted average shares used in computation of earnings per share:
Basic
455
450
453
447
Diluted
462
458
461
456
(1) Includes stock-based compensation as follows:
Fulfillment
$
42
$
25
$
133
$
90
Marketing
12
7
39
27
Technology and content
80
63
292
223
General and administrative
25
24
93
84
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
North America
Net sales
$
9,902
$
7,211
$
26,705
$
18,707
Segment operating expenses (1)
9,617
6,916
25,772
17,752
Segment operating income
$
285
$
295
$
933
$
955
International
Net sales
$
7,529
$
5,737
$
21,372
$
15,497
Segment operating expenses (1)
7,352
5,410
20,732
14,516
Segment operating income
$
177
$
327
$
640
$
981
Consolidated
Net sales
$
17,431
$
12,948
$
48,077
$
34,204
Segment operating expenses
16,969
12,326
46,504
32,268
Segment operating income
462
622
1,573
1,936
Stock-based compensation
(159
)
(119
)
(557
)
(424
)
Other operating income (expense), net
(43
)
(29
)
(154
)
(106
)
Income from operations
260
474
862
1,406
Total non-operating income (expense)
13
32
72
91
Provision for income taxes
(86
)
(84
)
(291
)
(352
)
Equity-method investment activity, net of tax
(10
)
(6
)
(12
)
7
Net income
$
177
$
416
$
631
$
1,152
Segment Highlights:
Y/Y net sales growth:
North America
37
%
45
%
43
%
46
%
International
31
26
38
33
Consolidated
35
36
41
40
Y/Y segment operating income growth (decline):
North America
(4
)
%
6
%
(2
)
%
35
%
International
(46
)
3
(35
)
14
Consolidated
(26
)
4
(19
)
23
Net sales mix:
North America
57
%
56
%
56
%
55
%
International
43
44
44
45
100
%
100
%
100
%
100
%
_______________________
(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
North America
Media
$
2,562
$
2,370
$
7,959
$
6,881
Electronics and other general merchandise
6,881
4,558
17,315
10,998
Other (1)
459
283
1,431
828
Total North America
$
9,902
$
7,211
$
26,705
$
18,707
International
Media
$
3,447
$
2,865
$
9,820
$
8,007
Electronics and other general merchandise
4,032
2,834
11,397
7,365
Other (1)
50
38
155
125
Total International
$
7,529
$
5,737
$
21,372
$
15,497
Consolidated
Media
$
6,009
$
5,235
$
17,779
$
14,888
Electronics and other general merchandise
10,913
7,392
28,712
18,363
Other (1)
509
321
1,586
953
Total Consolidated
$
17,431
$
12,948
$
48,077
$
34,204
Y/Y Net Sales Growth:
North America:
Media
8
%
13
%
16
%
15
%
Electronics and other general merchandise
51
71
57
74
Other
62
45
73
50
Total North America
37
45
43
46
International:
Media
20
%
11
%
23
%
18
%
Electronics and other general merchandise
42
46
55
54
Other
32
6
24
22
Total International
31
26
38
33
Consolidated:
Media
15
%
12
%
19
%
17
%
Electronics and other general merchandise
48
60
56
66
Other
58
39
66
46
Total Consolidated
35
36
41
40
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media
18
%
13
%
16
%
18
%
Electronics and other general merchandise
41
50
47
57
Other
31
10
18
24
Total International
29
29
31
34
Consolidated:
Media
14
%
13
%
16
%
16
%
Electronics and other general merchandise
47
62
53
67
Other
58
40
66
46
Total Consolidated
34
37
37
40
Consolidated Net Sales Mix:
Media
34
%
40
%
37
%
43
%
Electronics and other general merchandise
63
57
60
54
Other
3
3
3
3
100
%
100
%
100
%
100
%
____________________________
(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
December 31,
December 31,
2011
2010
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$
5,269
$
3,777
Marketable securities
4,307
4,985
Inventories
4,992
3,202
Accounts receivable, net and other
2,571
1,587
Deferred tax assets
351
196
Total current assets
17,490
13,747
Fixed assets, net
4,417
2,414
Deferred tax assets
28
22
Goodwill
1,955
1,349
Other assets
1,388
1,265
Total assets
$
25,278
$
18,797
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
11,145
$
8,051
Accrued expenses and other
3,751
2,321
Total current liabilities
14,896
10,372
Long-term liabilities
2,625
1,561
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none
–
–
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 473 and 468
Outstanding shares — 455 and 451
5
5
Treasury stock, at cost
(877
)
(600
)
Additional paid-in capital
6,990
6,325
Accumulated other comprehensive loss
(316
)
(190
)
Retained earnings
1,955
1,324
Total stockholders’ equity
7,757
6,864
Total liabilities and stockholders’ equity
$
25,278
$
18,797
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
Free cash flow (operating cash flow less purchases of fixed assets) — TTM
$
2,516
$
1,895
$
1,831
$
1,525
$
2,092
(17
%)
Free cash flow — TTM Y/Y growth
(14
%)
(18
%)
(8
%)
(17
%)
(17
%)
N/A
Invested capital (1)
$
7,380
$
7,931
$
8,551
$
9,147
$
9,680
31
%
Return on invested capital (2)
34
%
24
%
21
%
17
%
22
%
N/A
Common shares and stock-based awards outstanding
465
466
468
469
468
1
%
Common shares outstanding
451
452
454
455
455
1
%
Stock-based awards outstanding
15
14
15
14
14
(7
%)
Stock-based awards outstanding — % of common shares outstanding
3.2
%
3.1
%
3.2
%
3.2
%
3.0
%
N/A
Results of Operations
Worldwide (WW) net sales
$
12,948
$
9,857
$
9,913
$
10,876
$
17,431
35
%
WW net sales — Y/Y growth, excluding F/X
37
%
36
%
44
%
39
%
34
%
N/A
WW net sales — TTM
$
34,204
$
36,931
$
40,278
$
43,594
$
48,077
41
%
WW net sales — TTM Y/Y growth, excluding F/X
40
%
39
%
39
%
39
%
37
%
N/A
Operating income
$
474
$
322
$
201
$
79
$
260
(45
%)
Operating income — Y/Y growth, excluding F/X
3
%
(20
)%
(36
%)
(77
%)
(48
%)
N/A
Operating margin — % of WW net sales
3.7
%
3.3
%
2.0
%
0.7
%
1.5
%
N/A
Operating income — TTM
$
1,406
$
1,334
$
1,265
$
1,076
$
862
(39
%)
Operating income — TTM Y/Y growth, excluding F/X
27
%
7
%
(7
%)
(25
%)
(44
%)
N/A
Operating margin — TTM % of WW net sales
4.1
%
3.6
%
3.1
%
2.5
%
1.8
%
N/A
Net income
$
416
$
201
$
191
$
63
$
177
(58
%)
Net income per diluted share
$
0.91
$
0.44
$
0.41
$
0.14
$
0.38
(58
%)
Net income — TTM
$
1,152
$
1,054
$
1,038
$
871
$
631
(45
%)
Net income per diluted share — TTM
$
2.53
$
2.30
$
2.26
$
1.89
$
1.37
(46
%)
Segments
North America Segment:
Net sales
$
7,211
$
5,465
$
5,406
$
5,932
$
9,902
37
%
Net sales — Y/Y growth, excluding F/X
45
%
45
%
50
%
44
%
37
%
N/A
Net sales — TTM
$
18,707
$
20,392
$
22,208
$
24,014
$
26,705
43
%
Operating income
$
295
$
290
$
214
$
144
$
285
(4
%)
Operating margin — % of North America net sales
4.1
%
5.3
%
4.0
%
2.4
%
2.9
%
N/A
Operating income — TTM
$
955
$
972
$
986
$
943
$
933
(2
%)
Operating income — TTM Y/Y growth, excluding F/X
35
%
17
%
9
%
1
%
(2
%)
N/A
Operating margin — TTM % of North America net sales
5.1
%
4.8
%
4.4
%
3.9
%
3.5
%
N/A
International Segment:
Net sales
$
5,737
$
4,392
$
4,507
$
4,944
$
7,529
31
%
Net sales — Y/Y growth, excluding F/X
29
%
27
%
36
%
33
%
29
%
N/A
Net sales — TTM
$
15,497
$
16,539
$
18,070
$
19,580
$
21,372
38
%
Net sales — TTM % of WW net sales
45
%
45
%
45
%
45
%
44
%
N/A
Operating income
$
327
$
175
$
172
$
116
$
177
(46
%)
Operating margin — % of International net sales
5.7
%
4.0
%
3.8
%
2.4
%
2.4
%
N/A
Operating income — TTM
$
981
$
922
$
888
$
790
$
640
(35
%)
Operating income — TTM Y/Y growth, excluding F/X
20
%
4
%
(7
%)
(23
%)
(41
%)
N/A
Operating margin — TTM % of International net sales
6.3
%
5.6
%
4.9
%
4.0
%
3.0
%
N/A
Consolidated Segments:
Operating expenses (3)
$
12,326
$
9,392
$
9,527
$
10,616
$
16,969
38
%
Operating expenses — TTM (3)
$
32,268
$
35,037
$
38,404
$
41,860
$
46,504
44
%
Operating income
$
622
$
465
$
386
$
260
$
462
(26
%)
Operating margin — % of Consolidated sales
4.8
%
4.7
%
3.9
%
2.4
%
2.7
%
N/A
Operating income — TTM
$
1,936
$
1,894
$
1,874
$
1,734
$
1,573
(19
%)
Operating income — TTM Y/Y growth, excluding F/X
25
%
10
%
1
%
(11
%)
(21
%)
N/A
Operating margin — TTM % of Consolidated net sales
5.7
%
5.1
%
4.7
%
4.0
%
3.3
%
N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
Y/Y %
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Change
Supplemental
Supplemental North America Segment Net Sales:
Media
$
2,370
$
1,885
$
1,585
$
1,927
$
2,562
8
%
Media — Y/Y growth, excluding F/X
13
%
18
%
19
%
21
%
8
%
N/A
Media — TTM
$
6,881
$
7,170
$
7,430
$
7,767
$
7,959
16
%
Electronics and other general merchandise
$
4,558
$
3,303
$
3,496
$
3,635
$
6,881
51
%
Electronics and other general merchandise — Y/Y growth, excluding F/X
71
%
63
%
67
%
56
%
51
%
N/A
Electronics and other general merchandise — TTM
$
10,998
$
12,277
$
13,683
$
14,992
$
17,315
57
%
Electronics and other general merchandise — TTM % of North America net sales
59
%
60
%
62
%
62
%
65
%
N/A
Other
$
283
$
277
$
325
$
370
$
459
62
%
Other — TTM
$
828
$
945
$
1,095
$
1,255
$
1,431
73
%
Supplemental International Segment Net Sales:
Media
$
2,865
$
2,073
$
2,075
$
2,226
$
3,447
20
%
Media — Y/Y growth, excluding F/X
13
%
9
%
20
%
17
%
18
%
N/A
Media — TTM
$
8,007
$
8,247
$
8,772
$
9,238
$
9,820
23
%
Electronics and other general merchandise
$
2,834
$
2,285
$
2,398
$
2,681
$
4,032
42
%
Electronics and other general merchandise — Y/Y growth, excluding F/X
50
%
49
%
53
%
51
%
41
%
N/A
Electronics and other general merchandise — TTM
$
7,365
$
8,162
$
9,162
$
10,199
$
11,397
55
%
Electronics and other general merchandise — TTM % of International net sales
48
%
49
%
51
%
52
%
53
%
N/A
Other
$
38
$
34
$
34
$
37
$
50
32
%
Other — TTM
$
125
$
130
$
136
$
143
$
155
24
%
Supplemental Worldwide Net Sales:
Media
$
5,235
$
3,958
$
3,660
$
4,153
$
6,009
15
%
Media — Y/Y growth, excluding F/X
13
%
13
%
20
%
19
%
14
%
N/A
Media — TTM
$
14,888
$
15,417
$
16,202
$
17,005
$
17,779
19
%
Electronics and other general merchandise
$
7,392
$
5,588
$
5,894
$
6,316
$
10,913
48
%
Electronics and other general merchandise — Y/Y growth, excluding F/X
62
%
57
%
62
%
54
%
47
%
N/A
Electronics and other general merchandise — TTM
$
18,363
$
20,439
$
22,845
$
25,191
$
28,712
56
%
Electronics and other general merchandise — TTM % of WW net sales
54
%
55
%
57
%
58
%
60
%
N/A
Other
$
321
$
311
$
359
$
407
$
509
58
%
Other — TTM
$
953
$
1,075
$
1,231
$
1,398
$
1,586
66
%
Balance Sheet
Cash and marketable securities
$
8,762
$
6,881
$
6,355
$
6,326
$
9,576
9
%
Inventory, net — ending
$
3,202
$
2,888
$
3,229
$
3,770
$
4,992
56
%
Inventory turnover, average — TTM
11.4
11.6
11.3
10.8
10.3
(10
%)
Fixed assets, net
$
2,414
$
2,902
$
3,470
$
3,999
$
4,417
83
%
Accounts payable — ending
$
8,051
$
5,540
$
5,721
$
6,552
$
11,145
38
%
Accounts payable days — ending
72
66
69
72
74
3
%
Other
WW shipping revenue
$
437
$
330
$
331
$
360
$
531
21
%
WW shipping costs
$
999
$
786
$
820
$
918
$
1,466
47
%
WW net shipping costs
$
562
$
456
$
489
$
558
$
935
66
%
WW net shipping costs — % of WW net sales
4.3
%
4.6
%
4.9
%
5.1
%
5.4
%
N/A
Employees (full-time and part-time; excludes contractors & temporary personnel)
33,700
37,900
43,200
51,300
56,200
67
%
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.
(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.
Amazon.com, Inc.
Certain Definitions
Customer Accounts
References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.
Seller Accounts
References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.
Registered Developers
References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.
Units
References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide…
– as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.
It’s time for another round of what they’re saying about Yahoo.
It seems like an eternity ago that Yahoo ousted CEO Carol Bartz. In Internet time, it may as well have been that long, though it was really only September.
In that time, we’ve seen limitless specualtion and rumor about what the company would be doing. And that continues, though this might be a little bit more substantial.
Yahoo is reportedly considering a sale of its Asian assets. The New York Times’ Dealbook is reporting, citing “people briefed on the matter” that it’s considering the sale of its holdings in Alibaba group and its Japanese affiliate back to their majority owners in a $17 billion deal, and that the meetings are expected to go down tomorrow.
CNN Money says Yahoo’s entire market cap is just over $18 billion, and asks if this means if Yahoo itself is only worth around $1 billion. They added in an update, “Some readers have pointed out that Yahoo currently has $2.11 billion of cash sitting on its balance sheet. Does that somehow make the value of its U.S. assets negative? Something seems very wrong here…”
Beyond that, Kara Swisher is reporting that the company has “intensified” its search for a CEO, and that Hulu’s Jason Kilar is its “dream unicorn candidate”. She also mentions Google business lead Nikesh Arora, Juniper CEO Kevin Johnson, entrepreneur Brian McAndrews, and “others”.
In other Yahoo news, the company did release a new version of its LiveStand iPad app today. Included in that: a new recipe finder, local deals from Groupon, LivingSocial, Bloomspot, etc. , guest mode and Twitter integration. It also includes new publications like: Shine from Yahoo, Technology Review by MIT, The Ticket from Yahoo News, Minyanville, Victorian Christmas and Big Think.
Did you know there was a tablet computer called the I-Pad nearly a decade ago? It was marketed by a Taiwanese company called Proview Technology, though it wasn’t quite as successful as the “iPad” you may be more familiar with.
Proview reportedly registered trademarks for the IPAD name in the EU, China, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam in the early 2000’s.
A few months ago, Proview sought to sue Apple for trademark infringement in China and the U.S. The Financial Times had a conversation with Proview Chairman Yang Rongshan back then, who said that the company agreed to sell “global trademark” for the name to a US-registered company called IP Application Development, but didn’t realize that the company was linked to Apple. According to that conversation, Yang indicated the trademarks for China weren’t included, as they were filed by a different Proview affiliate out of Hong Kong (in 2000).
Now, the Financial Times is reporting that a Chinese court has rejected Apple’s claim of ownership of the iPad trademark, which could present some problems with selling in China, where it has a handful of retail stores and about a thousand resellers.
Now consider that when Apple reported its Q4 earnings in October, CEO Tim Cook emphasized that China continues to be the company’s fastest-growing market. In the country, sales were up nearly four times year-over-year, accounting for a sixth of Apple’s overall sales.
“It’s an area of enormous opportunity…The sky’s the limit in there,” Cook was quoted as saying on the earnings call.
It looks like the legal system might be at least partially limiting at the moment.
eBay’s Todd Cohen made a spirited plea to the House of Representatives Committee on the Judiciary earlier today against the proposed remote sales tax. Were the proposal to pass, Cohen fears that small businesses will suffer the most and, given that small businesses are a thriving market for eBay, they’re right to look out for the little guys. Cohen also voiced his and eBay’s support for H. Res 95, which would protect Internet entrepreneurs and small businesses from the new tax proposals.
In defense of small businesses and what they stand to lose, Cohen explained :
The share of online sales being done by retailers with less than $20 million in sales is falling. Under the current mix of business costs, including the remote sales tax rules, the small business competitors are not taking over the field. Instead, it is the largest retailers that are growing. And not surprisingly, those giant retailers are lined up united in proposing a change in remote sales tax law that will harm the smaller retailers who do not have national physical presence. If small business retailers using the Internet were gaining unfair advantages from current remote sales tax laws, one would expect that their share of Internet sales would be growing. But it is not.
Although Cohen did not identify Amazon.com by name, it’s probably the internet’s worst kept secret that he likely had them in mind as he made these pointed statements. Additionally, Cohen suggested a Small Business Exemption that would reduce the tax burden on small businesses:
A real Small Business Exemption would protect small retailers who are already falling behind. Permanently protecting small business retailers from national remote sales tax collection burdens will promote new retail competition. … Protecting small business from burdens that will undermine their growth and even directly promoting small business operations is not a new or novel concept. There has traditionally been bipartisan support for small business promotion.
Cohen’s full congressional statement can be read below.
Amazon, alternately, has come out in favor of the online sales tax bill. From their official statement:
Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed,” said Paul Misener, Amazon vice president, global public policy. “It’s a win-win resolution – and as analysts have noted, Amazon offers customers the best prices with or without sales tax.
If enacted, the Enzi-Durbin-Alexander bill will allow states to require out of state retailers to collect sales tax at the time of purchase and remit those taxes on behalf of customers, and it will facilitate collection on behalf of third party sellers. Thus, this bill will allow states to obtain additional revenue without new taxes or federal spending and will make it easy for consumers and small retailers to comply with state sales tax laws.
UPDATE: Shortly after this story was published, Ashley Morris, CRC Public Relations with Amazon.com, contacted WebProNews and delivered the following statement. It is the testimony given earlier today by Paul Misener, Vice President for Global Public Policy, Amazon.com:
Testimony of Paul Misener, Vice President for Global Public Policy, Amazon.com
Hearing on the Constitutional Limitations on States’ Authority to Collect Sales Tax in E-Commerce
Before the Committee on the Judiciary, United States House of Representatives
November 30, 2011
[Also available at www.amazon.com/pr]
“Thank you, Chairman Smith and Ranking Member Conyers, for inviting me to testify. Amazon has long supported an even-handed federal framework for state sales tax collection and, to that end, we have participated in the Streamlined Sales Tax Project for over a decade, and we are pleased to participate in this hearing. Amazon strongly supports enactment of a federal bill with appropriate provisions.
Mr. Chairman, Congress – and only Congress – may, should, and feasibly can authorize the states to require out-of-state sellers to collect the sales tax already owed.
At the Philadelphia Convention, which the Founders convened principally to consider the challenging issue of trade among the states, Congress was granted exclusive power to regulate interstate commerce. Exactly two centuries later, in 1987, North Dakota challenged this exclusivity and, following five years of litigation, the U.S. Supreme Court held in Quill v. North Dakota that requiring out-of-state sellers to collect tax would impose an unconstitutional burden on interstate commerce. The Quill court also confirmed that Congress eventually could “disagree with our conclusions” and that this issue is “not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve.”
Far from an e-commerce “loophole,” the constitutional limitation on states’ authority to collect sales tax is at the core of our Nation’s founding principles. For this reason, Amazon has steadfastly opposed state attempts to require out-of-state sellers to collect absent congressional authorization.
Mr. Chairman, Congress should authorize the states to require collection, with the great objects of protecting states’ rights, addressing the states’ needs, and leveling the playing field for all sellers.
States’ rights should be protected. States need the freedom to make their own revenue policy choices. For example, Texas has chosen to eschew personal income tax, and that decision makes the Texas budget particularly sensitive to uncollected sales tax. The right of Texas to make this policy choice effective should be protected. Congress should protect the states’ rights, and authorize them to require collection of sales tax revenue already owed, and doing so would not violate pledges that are limited to questions of income tax rates and deductions.
The states’ financial needs should be addressed. The states face serious budget shortfalls, yet the federal government faces its own fiscal challenges. Congress should help address the states’ budget shortfalls without spending federal funds, by authorizing the states to require collection of the billions of revenue dollars already owed.
Fairness among sellers should be created and maintained. Sellers should compete on a level playing field. Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting un-level playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance.
Mr. Chairman, Congress feasibly can authorize the states to require collection. The facts in the Quill decision arose a quarter of a century ago, and the Supreme Court’s decision was rendered a year before the World Wide Web was invented. With today’s computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect.
Much attention has been paid to the size of a “small seller exception” threshold in federal legislation – and rightfully so. Such a threshold, which would exempt some sellers from a collection requirement, must be kept very low to attain the objectives of protecting states’ rights, addressing the states’ needs, and creating fairness among sellers.
In this context, several kinds of small volume sellers must be considered.
Foremost are the Main Street small business retailers who, unless the small seller exception threshold is kept very low, will forever face an un-level playing field compared to a newly-created exempt class of out-of-state sellers.
Next are the online advertising affiliates, tens of thousands of whom have lost jobs or income as the result of ineffective, counterproductive sales tax laws recently enacted in a half-dozen states. Congress should act to make such laws uninteresting and irrelevant to the states – and thereby immediately restore the lost jobs and income – by authorizing the states to require collection.
Small volume online sellers have received most of the attention, and not without reason. No one wants these sellers to shoulder alone burdens compared to those faced by the small business retailers who already collect sales tax in our local communities. Yet no one should want these online sellers to take advantage of a newly-created un-level playing field over small Main Street businesses, and no one should want government to pick business model winners and losers this way.
The consequences of the threshold level to states’ rights, the states’ needs, and fairness are very significant, because a surprisingly large fraction of e-commerce is conducted by smaller volume sellers. For example, nearly 30% of uncollected sales tax revenue today is attributable to sellers with annual online sales below $150,000, and only one percent of online sellers sell more than this amount. In other words, a $150,000 exception would deny the states nearly 30% of the newly-available (yet already owed) revenue, but would exempt from collection 99% of online sellers. Any higher threshold would deny the states even more revenue and keep the playing field even more un-level.
Fortunately, today’s computing and communications technology will allow all online sellers to collect and remit tax like Main Street retailers.
Large volume online sellers already have and use this technology. Amazon and Overstock, for example, collect tax on sales to consumers in states where our retail businesses have nexus. And the online arms of large multichannel retailers collect in the states where they have retail stores. Quite obviously, state sales tax can be collected nationwide, at least by larger volume sellers like Amazon, Overstock, and the multichannel stores, for they have the technology.
This technology is not limited to large sellers. Rather, service providers also make the technology available to medium and small volume sellers. Thus, collection is either by sellers or for sellers. There are many service providers already: ADP, Avalara, and FedTax, for example.
Two other examples come to mind: Amazon and eBay.
Both companies use sophisticated computing and communications technology to serve their seller customers. But, while Amazon is prepared to make its technology available as a service to help sellers by collecting sales tax for them, eBay seeks to avoid any role in collection, claiming that small volume sellers will be burdened and, implicitly, that eBay’s technology is not capable of helping its largest sellers to collect. And these claims are made despite the fact that eBay manages to collect the transaction fees it charges its sellers, and despite the fact that eBay already calculates state sales tax for eBay sellers, all the way down to the local jurisdiction level. Amazon and many other service providers will help smaller online sellers collect; surely eBay can as well.
In conclusion, Mr. Chairman, Congress may, should, and feasibly can attain the objectives of protecting states’ rights, addressing the states’ needs without federal spending, and leveling the playing field for all sellers – but only if any “small seller exception” is kept very low.
The time to act is nigh. Amazon is grateful for this hearing, and we look forward to working with you and your colleagues in Congress to pass appropriate legislation as soon as possible.
Now that we’ve entered the holiday shopping season, having just finished with the Thanksgiving rushes of Black Friday and Cyber Monday, the early results are starting to trickle in, and the reports are good, especially for online retailers.
According to a comScore report, in relation to online retail, spending during Black Friday saw an increase of 26 percent when compared to 2010. The total for online Black Friday spending, by comScore’s numbers, is $816 million. Not only are the numbers promising, but the methods in which online shoppers conduct their business is expanding beyond the home/work computer.
Mobile devices in reference to online shopping is increasing as well. In fact, the rise in mobile technology adoption gives potential online shoppers a degree of flexibility the home computers do not. No longer are you required to be at computer at a certain times, all because of the freedom these mobile devices provide. In fact, the impact of mobile devices in regards to this flexibility have some speculating about the death of Cyber Monday, because shoppers are no longer required to be tethered to a non-mobile computing device:
But the loss of Cyber Monday, which got its name when most people had to go into their offices to shop online, shows how far broadband, and now mobile, have come.
In reference to the loss of Cyber Monday, Giga Om’s article offers an update:
Akamai noted on Monday night that Thanksgiving evening experienced the peak traffic of the holiday season, making this the year that turkey day topped Black Friday’s and Cyber Monday’s peaks.
This makes sense considering the explosive growth of smartphones. With these connected devices, users no longer have to worry about running to their workstation or their home rig to take part in these online sales, and because of the increased accessibility, more and more online shoppers don’t have to wait until they are in front of a computer to participate.
Over at Shop.org, the mobile device holiday shopping increase was forecast thusly:
One quarter of Cyber Monday shoppers anticipate using mobile devices. The real standout this year, of course, is the continued rise of mobile devices for Cyber Monday shoppers: 14.5% of all Cyber Monday shoppers expect to use a smartphone and/or tablet device for at least part of their shopping, double the number we saw last year (6.9%). Among online shoppers this year, however, that’s actually a whopping 23.8%. For a retailer, that’s another golden opportunity to proactively make an offer to a specific customer, especially if that retailer can tap into location-based mobile advertisements with a specific call to action.
Clearly, people want to spend during the Thanksgiving sales season, which kicks off the holiday shopping season on an annual basis. Furthermore, with more and more consumers acquiring mobile devices, it only makes sense that mobile device shopping increases as well.
While this is becoming less and less of an issue, especially for the bigger consumption sites, it is still wise to make sure your site is mobile-friendly, especially if you’re planning on capitalizing on this willingness to spend.
According to Samsung execs, there’s already a plan in motion to stop the sales of the upcoming iPhone 5 in Korea. Of course the phone is not only unreleased but at this point is still unannounced. But that hasn’t stopped Samsung from preparing for the release, with a long list of patent suits.
According to The Korea Times, Samsung plans to file suits to block the sales of the iPhone 5 shortly after it launches in the country. They quote a “senior executive from Samsung Electronics” who says –
Just after the arrival of the iPhone 5 here, Samsung plans to take Apple to court here for its violation of Samsung’s wireless technology related patents,’’ said a senior executive from Samsung Electronics, asking not to be identified.
For as long as Apple does not drop mobile telecommunications functions, it would be impossible for it to sell its i-branded products without using our patents. We will stick to a strong stance against Apple during the lingering legal fights.
All over the world there are pending patent infringement lawsuits between Apple and Samsung. Back in April, Apple launched an attack against Samsung, saying that their products too closely resemble Apple’s products likes the iPhone and iPad. They accused them of “slavishly copying Apple’s innovative technology” instead of “pursuing independent product development.”
It appears that the reported future patent disputes in Korea involve this same concept, “wireless technology related patents.”
On more little nugget from this report? The Samsung sources hinted that the iPhone 5 will, in fact, sport wireless payment functionality, or the so-called NFC technology. Early rumors said that the new phone would come equipped with NFC capabilities, but later reports have quashed that speculation, saying that NFC probably won’t arrive until the generation after the iPhone 5.
Salesforce had a slew of announcements at its Dreamforce conference, including a new version of Chatter called Chatter Now. Also announced as part of what the company is calling the “Social Enteprise,” were: Chatter Approvals, Chatter Customer Groups, Chatter Service and Data.com, which the company says will accelerate social app adoption in the enterprise.
Also announced was touch.salesforce.com, designed to bring mobile apps into the social enterprise with HTML5, optimized for touch devices for all Salesforce and Force.com apps.
Salesforce also announced Heroku for Java, Chatter Connect and Database.com, which the comp;any says, “will deliver the most open, flexible and social enterprise platform in the industry.
“Our social enterprise vision fundamentally changes how companies collaborate, share and manage information,” said Salesforce chairman and CEO Marc Benioff. “By creating social customer profiles, employee social networks, customer social networks and product social networks, companies can delight their customers in entirely new ways.”
Here’s how Salesforce describes each product:
Chatter Now: Chatter Now will deliver real-time collaboration by enabling users to see when their colleagues are online, instantly chat with them in context and share their screen without leaving Chatter.
Chatter Customer Groups: For the first time, Chatter users will be able to invite people outside of their organization into their Chatter network to collaborate. Chatter users can invite customers and partners to collaborate in private, secure groups, which will extend enterprise collaboration beyond the four walls of a company.
Chatter Approvals: With Chatter Approvals, users will be able to take action on any approval process from directly within their Chatter feed. Sales discounts, hiring decisions, vacation requests and more can all be approved without having to leave Chatter. Approval processes will now have context, including comments and documents, to help increase productivity and help users make informed decisions.
Chatter Service: Salesforce Service Cloud is creating the ultimate self-service destination for the social enterprise with Chatter Service. With Chatter Service, customers will be able to ask their question once in a familiar social feed, and have the answer come to them in an instant–whether it’s from the knowledge base, the community of experts or a service agent. Chatter Service will also connect to public social networks, such as Facebook, extending the community far beyond the boundaries of a traditional self-service portal. Customers have gone social and the Service Cloud, with Chatter Service, is the way that companies can create a social, self-service community to delight their customers
Data.com: Launching at Dreamforce, Data.com gives sales and marketing professionals the information they need to effectively plan, target and execute sales and marketing campaigns – all within Salesforce. Data.com will unify socially-crowd sourced contact information from Jigsaw and company information from Dun & Bradstreet (D&B) in one place to help customers build and maintain social customer profiles.
Touch.salesforce.com will deliver an optimized experience of Salesforce apps and customizations for touch devices. Leveraging the open standard HTML5 technology, touch.salesforce.com will allow users to access salesforce.com from the most popular smart phones, tablet devices and operating systems. Touch.salesforce.com will also enhance the Force.com platform to become the destination for developing trusted, enterprise mobile apps. Not only will Force.com developers be able to mobilize existing Force.com apps, they will also be able to build new, secure mobile apps quickly and easily.
Heroku for Java: Heroku now gives more than 6 million enterprise Java developers a clear path to build social, mobile and open cloud apps. Enterprises and developers have made significant investments in Java skills. Now, those skills and investments can be applied to creating the social enterprise by developing customer and product social networks. Java joins Ruby on Rails, Clojure and Node.js as the fourth language for the Heroku platform. For more information and technical details about Java on Heroku, visit http://www.heroku.com/java
Chatter Connect: Chatter Connect makes other applications social by extending Chatter to custom and third-party applications. The Chatter REST API makes it easy for developers to integrate Chatter into other applications, such as intranets and portals, custom mobile apps and other enterprise apps. In addition, Chatter for SharePoint allows companies to make SharePoint social – companies will be able to embed Chatter feeds in a Sharepoint MySite or TeamSite and share documents from Sharepoint to Chatter.
Database.com is GA: Database.com, the underlying cloud database already serving the company’s 100,000+ customers, is now generally available to all enterprises. Database.com is a proven multi-tenant database, managing more than 36 billion transactions and 13 billion custom objects in the second quarter alone. It is open, massively scalable, automatically elastic and built from the ground up to power this new generation of social and mobile cloud applications.
Database.com Data Residency Option: The new Database.com Data Residency Option will be for companies that want to take full advantage of the cloud, but have requirements, policies or perceptions that may prevent them from gaining the strategic benefits that cloud computing has to offer. With Database.com Data Residency Option, companies will have the option of keeping readable versions of sensitive data where they want, allowing them to take full use of salesforce.com’s trusted cloud computing model.
Also worth noting, Salesforce has Metallica headlining the Dreamforce Global Gala:
U.S. consumer technology retail sales fell less than one percent for the 2009 holiday season, according to a new report from The NPD Group.
The report found sales for the five-week holiday period reached $10.8 billion, a big improvement from the 6 percent decline during the 2008 holiday season.
The holiday season had its share of fluctuations. Overall revenue declined three out of the five weeks. While the second week of the season posted the largest revenue growth it only represented for 15 percent of overall holiday sales. The final week of the season also saw revenue growth and represented 22 percent of all sales, so the success of the final week was more relevant to the overall success of the season.
"The dynamics of the holiday season changed this year; the holiday season started before Black Friday as retailers ran Black Friday-like sales throughout November," said Stephen Baker, vice president of industry analysis at NPD.
"That move may have lessened the Black Friday hype for consumers, but the increase during the final week of the season is a sign that consumers either went back out or waited it out to get the best deal."
PCs and flash-based camcorders were popular this holiday leading the way in unit growth among large categories, but total sales numbers were dependent on the success of PCs and flat-panel TVs. Combined they accounted for 41 percent of the revenue over the five week holiday period, up from 39 percent in 2008 and 34 percent in 2007.
Despite the high revenue, flat-panel TVs registered a decline in dollars of 13 percent, in line with their performance during most of 2009. That decline pulled down the industry overall. MP3 players, for the third year in a row, were the largest unit volume category despite increased ASPs and declining unit volumes.
"Just cutting prices this year was not enough to guarantee successful sales results," said Baker. Flat-panel TVs had a disappointing holiday because there wasn’t enough price-cutting on the right items, while notebook PCs and camcorders offered new form factors and price points that drove enormous increases in units and revenue despite falling prices."
As a result of these developments, SalesCrunch began thinking about an acquisition of WebEx. Sean Black, the CEO and Founder of SalesCrunch, told WebProNews that the companies had talked several months ago but had not reached a deal. Now, in light of the recent events, he thinks the company may be more open to his offer.
