8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 20, 2008

Date of Report (date of earliest event reported)

SALESFORCE.COM, INC.

(Exact name of Registrant as specified in charter)

Delaware	001-32224	94-3320693
(State or other jurisdiction of incorporation)	(Commission File Number)	(I. R. S. Employer Identification No.)

The Landmark @ One Market, Suite 300

San Francisco CA 94105

(Address of principal executive offices)

Registrant’s telephone number, including area code: (415) 901-7000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02 – Results of Operations and Financial Condition

On August 20, 2008, the Company issued a press release announcing its results for the quarter ended July 31, 2008. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

The information in this current report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Section 8 – Other Events

Item 8.01 – Other Events

On August 20, 2008, the Company issued a press release announcing its acquisition of InStranet Inc., a knowledge management technology company. A copy of the press release is attached as Exhibit 99.2 to this current report on Form 8-K and is incorporated by reference herein.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1	Earnings Press Release dated August 20, 2008
99.2	Acquisition Press Release dated August 20, 2008

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 20, 2008	salesforce.com, inc.
	/s/ David Schellhase
	David Schellhase, Senior Vice President and General Counsel

Exhibit Index

Exhibit Number	Exhibit Title
99.1	Earnings Press Release dated August 20, 2008
99.2	Acquisition Press Release dated August 20, 2008

EX-99.1

Exhibit 99.1

David Havlek

salesforce.com

Investor Relations

415-536-2171

dhavlek@salesforce.com

Jane Hynes

salesforce.com

Public Relations

415-901-5079

jhynes@salesforce.com

Salesforce.com Announces Record Fiscal Second Quarter Results

First Ever Software as a Service Company to Exceed $1 Billion Annual Revenue Run Rate

• Record Revenue of $263 Million, up 49% Year-Over-Year

• Operating Cash Flow of $53 Million, up 53% Year-Over-Year

• GAAP EPS of $0.08, up 167% Year-Over-Year

• Record 4,100 New Customer Additions; Total Customers Now 47,700

• Total Cash and Marketable Securities Increases $326 Million Year-Over-Year to $823 Million

• Company Announces Strategic Acquisition of InStranet, Inc. to Accelerate Growth in Salesforce CRM Customer Service and Support

• Company Raises FY09 Revenue Guidance to $1.070 - $1.075 Billion

SAN FRANCISCO, Calif. – August 20, 2008 – Salesforce.com (NYSE: CRM), the market and technology leader in Software as a Service (SaaS) and Platform as a Service (PaaS), today announced results for its fiscal second quarter ended July 31, 2008.

“By becoming the first ever Software as a Service company to achieve an annualized revenue run rate of one billion dollars, our second quarter performance is a milestone for salesforce.com, and for the cloud computing industry, “ said Marc Benioff, Chairman and CEO. “Our largest customers are increasingly becoming the best examples of what is possible using the power of our growing portfolio of Software as a Service applications and our emerging Platform as a Service.”

Salesforce.com delivered the following results for its second quarter fiscal year 2009:

Revenue: Total Q2 revenue was $263.1 million, an increase of 49% on a year-over-year basis and an increase of 6% on a quarter-over-quarter basis. Subscription and support revenues were $239.7 million, an increase of 50% on a year-over-year basis and an increase of 6% on a quarter-over-quarter basis. Professional services and other revenues were $23.4 million, an increase of 41% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis.

Earnings per Share: Q2 GAAP diluted earnings per share were approximately $0.08, including approximately $19 million in stock based compensation and approximately $1.3 million in amortization of purchased intangibles related to previously announced acquisitions. For the basis of Q2 GAAP EPS calculations, there was an average of approximately 126 million diluted shares outstanding during the quarter.

Cash: Cash from operations for the fiscal second quarter was approximately $53 million, up 53% year-over-year, and seasonally down 37% from Q1. Total cash, cash equivalents and marketable securities finished the quarter at approximately $823 million, an increase of approximately $73 million from Q1 and up approximately $326 million from July 31, 2007.

Deferred Revenue: Deferred revenue was approximately $480 million as of July 31, 2008, an increase of 49% on a year-over-year basis and up 2% on a quarter-over-quarter basis.

Customers Additions: During the quarter net paying customers rose approximately 4,100, a company record, to approximately 47,700. Compared with the year ago quarter, net paying customers have grown by approximately 12,400.

InStranet Acquisition: Earlier today, salesforce.com announced the acquisition of InStranet, the leading provider of knowledge management technology for business to consumer call centers. The addition of this innovative technology will increase the momentum of Salesforce CRM Customer Service and Support in a growing market, which is currently estimated at $3.4 billion by Gartner (Gartner, Market Trends: CRM Software, Worldwide, 2007-2012, March 31, 2008). Salesforce.com’s acquisition of InStranet closed on August 4, 2008, for approximately $31.5 million, which includes the assumption of $4.2 million in cash on InStranet’s balance sheet.

Guidance: As of August 20, 2008, salesforce.com is initiating guidance for its third quarter, fiscal year 2009. In addition, the company is updating its revenue and earnings per share guidance for its full fiscal year 2009.

Q3 FY09: Revenue for the company’s third fiscal quarter is projected to be in the range of approximately $273 million to approximately $274 million. Excluding the effect of the InStranet acquisition, the company’s EPS outlook is $0.08 to $0.09. Including the effect of the InStranet acquisition, estimated at $0.02 for the third quarter, the company is issuing guidance that its GAAP fully diluted EPS will be in the range of $0.06 to $0.07. The GAAP EPS estimate also includes the effects of stock based compensation and the amortization of purchased intangibles. For the third fiscal quarter, stock based compensation expense is expected to be approximately $20 million, and the expense associated with amortization of purchased intangibles, including that associated with the acquisition of InStranet, is expected to be approximately $2.0 million. For purposes of the Q3 GAAP fully diluted EPS calculation, the company is expecting an average diluted shares count of approximately 127 million shares, and a GAAP tax rate of 48%.

Fiscal FY09: The company is raising its full year revenue guidance it provided on May 21, 2008, with revenue now expected to be in the range of approximately $1.070 billion to approximately $1.075 billion. Excluding the effect of the InStranet acquisition the company’s EPS outlook has improved to $0.34 to $0.35, from its prior guidance of $0.33 to $0.34. Including the effect of the InStranet acquisition, estimated at $0.05 for the full year, the company is updating its fiscal FY09 GAAP fully diluted EPS guidance to be in the range of $0.29 to $0.30. The GAAP EPS estimate includes the effects of stock based compensation and the amortization of purchased intangibles. For the full fiscal year 2009, stock based compensation expense is expected to be approximately $83 million, and the expense associated with the amortization of purchased intangibles, including that associated with InStranet, is currently expected to be approximately $6.6 million. For purposes of the fiscal year 2009 GAAP fully diluted EPS calculation, the company is expecting an average diluted share count of approximately 126 million shares, and a GAAP tax rate of 48%.

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its second quarter fiscal 2009 results today at 2:00 p.m. Pacific Time. 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 706-902-1764. A replay will be available at (800) 642-1687 or (706) 645-9291, passcode 59172236, until midnight Eastern Time September 5, 2008.

About salesforce.com

Salesforce.com is the market and technology leader in Software as a Service (SaaS) and Platform as a Service (PaaS). The company’s portfolio of SaaS applications, including its award-winning CRM, available at http://www.salesforce.com/products/, has revolutionized the ways that customers manage and share business information over the Internet. The company’s Force.com PaaS enables customers, developers and partners to build powerful on-demand applications that deliver the benefits of multi-tenancy across the enterprise. Applications built on the Force.com platform, available at http://www.force.com/, can be easily shared, exchanged and installed with a few simple clicks via salesforce.com’s AppExchange marketplace available at http://www.salesforce.com/app exchange/.

As of July 31, 2008, salesforce.com manages customer information for approximately 47,700 customers including ABN AMRO, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, Sprint Nextel, and SunTrust Banks. 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 in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM”. For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

###

“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected revenue and GAAP earnings per share for the third fiscal quarter of 2009 and the full fiscal year 2009, and our expected tax rate, stock based compensation expense, amortization rate, and shares outstanding, the achievement of which involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our 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 our financial and operating results, rate of growth and anticipated revenue run rate; errors, interruptions or delays in our service or our Web hosting; breaches of our security measures; the financial impact the acquisition of InStranet and any future acquisitions; the nature of our business model; our ability to continue to release, and gain customer acceptance of, new and improved versions of our service; successful customer deployment and utilization of our existing and future services; competition; various financial aspects of our subscription model; the emerging market in which we operate; our ability to hire, retain and motivate our employees and manage our growth; changes in our customer base; technological developments; regulatory developments; unanticipated changes in our effective tax rate; and fluctuations in the number of shares we have outstanding, the price of such shares, foreign currency exchange rates and interest rates.

Further information on these and other factors that could affect our 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 our Form 10-Q that will be filed for the quarter ended July 31, 2008 and our Form 10-K for the fiscal year ended January 31, 2008. These documents are or will be available on the SEC Filings section of the Investor Information section of our 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.

Copyright (c) 2008 salesforce.com, inc. All rights reserved. Salesforce and the “no software” logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.

salesforce.com, inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
	2008			2007			2008			2007
Revenues:
Subscription and support	$	239,720		$	159,998		$	465,061		$	307,688
Professional services and other		23,357			16,581			45,638			31,303
Total revenues		263,077			176,579			510,699			338,991
Cost of revenues (1):
Subscription and support		30,668			22,375			59,378			42,559
Professional services and other		23,423			19,037			46,011			38,020
Total cost of revenues		54,091			41,412			105,389			80,579
Gross profit		208,986			135,167			405,310			258,412
Operating expenses (1):
Research and development		24,033			15,096			43,800			29,217
Marketing and sales		130,774			90,216			253,478			174,141
General and administrative		38,081			26,508			76,513			51,593
Total operating expenses		192,888			131,820			373,791			254,951
Income from operations		16,098			3,347			31,519			3,461
Interest, net		6,708			5,615			13,430			10,622
Other income (expense)		(840	)		280			(1,603	)		449
Income before provision for income taxes and minority interest		21,966			9,242			43,346			14,532
Provision for income taxes		(10,558	)		(4,653	)		(20,869	)		(8,495	)
Income before minority interest		11,408			4,589			22,477			6,037
Minority interest in consolidated joint venture		(1,412	)		(854	)		(2,926	)		(1,572	)
Net income	$	9,996		$	3,735		$	19,551		$	4,465
Basic net income per share	$	0.08		$	0.03		$	0.16		$	0.04
Diluted net income per share	$	0.08		$	0.03		$	0.16		$	0.04
Shares used in computing basic net income per share		120,863			116,294			120,321			115,637
Shares used in computing diluted net income per share		125,626			121,333			125,091			120,993
(1)    Amounts include stock-based expenses, as follows:
Cost of revenues	$	2,657		$	1,965		$	5,332		$	3,739
Research and development		2,259			1,510			4,358			2,787
Marketing and sales		8,749			6,265			16,870			11,884
General and administrative		5,219			3,691			10,389			7,033
Total stock-based expenses	$	18,884		$	13,431		$	36,949		$	25,443

salesforce.com, inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended July 31,				Six Months Ended July 31,
	2008		2007		2008		2007
Revenues:
Subscription and support	91	%	91	%	91	%	91	%
Professional services and other	9		9		9		9
Total revenues	100		100		100		100
Cost of revenues:
Subscription and support	12		12		12		13
Professional services and other	9		11		9		11
Total cost of revenues	21		23		21		24
Gross profit	79		77		79		76
Operating expenses:
Research and development	9		9		8		9
Marketing and sales	50		51		50		51
General and administrative	14		15		15		15
Total operating expenses	73		75		73		75
Income from operations	6		2		6		1
Interest, net	2		3		2		3
Other income (expense)	0		0		0		0
Income before provision for income taxes and minority interest	8		5		8		4
Provision for income taxes	(3	)	(2	)	(3	)	(2	)
Income before minority interest	5		3		5		2
Minority interest in consolidated joint venture	(1	)	(1	)	(1	)	(1	)
Net income	4	%	2	%	4	%	1	%
Stock-based expenses as a percentage of total revenues, as follows:
Cost of revenues	1	%	1	%	1	%	1	%
Research and development	1		1		1		1
Marketing and sales	3		4		3		4
General and administrative	2		2		2		2
Total stock-based expenses	7	%	8	%	7	%	8	%

salesforce.com, inc.

Condensed Consolidated Balance Sheets

(in thousands)

	July 31, 2008			January 31, 2008
	unaudited
Assets
Current assets:
Cash and cash equivalents	$	427,043		$	279,095
Short-term marketable securities		151,298			171,748
Accounts receivable, net		146,982			220,061
Deferred commissions		35,751			35,679
Deferred income taxes		7,906			7,173
Prepaid expenses and other current assets		33,148			27,055
Total current assets		802,128			740,811
Marketable securities, noncurrent		245,076			218,957
Fixed assets, net		56,643			41,380
Deferred commissions, noncurrent		14,615			16,435
Deferred income taxes, noncurrent		34,989			26,512
Capitalized software, net		24,218			23,061
Goodwill		8,556			8,556
Other assets, net		17,318			13,881
Total assets	$	1,203,543		$	1,089,593
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	14,428		$	7,478
Accrued expenses and other current liabilities		117,180			125,996
Income taxes payable		1,269			3,622
Deferred revenue		466,948			468,821
Total current liabilities		599,825			605,917
Income taxes payable, noncurrent		10,289			8,465
Long-term lease abandonment liability and other		2,986			2,136
Deferred revenue, noncurrent		12,598			12,073
Minority interest		11,869			8,943
Total liabilities		637,567			637,534
Stockholders’ equity:
Common stock		121			119
Additional paid-in capital		568,078			471,802
Accumulated other comprehensive loss		(4,188	)		(2,276	)
Retained earnings (deficit)		1,965			(17,586	)
Total stockholders’ equity		565,976			452,059
Total liabilities and stockholders’ equity	$	1,203,543		$	1,089,593

salesforce.com, inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
	2008			2007			2008			2007
Operating activities:
Net income	$	9,996		$	3,735		$	19,551		$	4,465
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interest		1,412			854			2,926			1,572
Depreciation and amortization		8,870			6,045			17,028			10,893
Amortization of deferred commissions		13,907			9,644			28,630			18,683
Expenses related to stock-based awards		18,884			13,431			36,949			25,443
Excess tax benefits from employee stock plans		(11,843	)		(8,920	)		(24,541	)		(15,206	)
Changes in assets and liabilities		11,849			9,865			56,364			25,634
Net cash provided by operating activities		53,075			34,654			136,907			71,484
Investing activities:
Changes in marketable securities		(25,118	)		(13,735	)		(8,578	)		(47,947	)
Capital expenditures		(13,036	)		(10,104	)		(37,213	)		(26,061	)
Net cash used in investing activities		(38,154	)		(23,839	)		(45,791	)		(74,008	)
Financing activities:
Proceeds from the exercise of stock options and warrants		22,525			15,404			34,010			23,704
Excess tax benefits from employee stock plans		11,843			8,920			24,541			15,206
Principal payments on capital lease obligations		—			(6	)		(5	)		(163	)
Net cash provided by financing activities		34,368			24,318			58,546			38,747
Effect of exchange rate changes		(794	)		324			(1,714	)		118
Net increase in cash and cash equivalents		48,495			35,457			147,948			36,341
Cash and cash equivalents, beginning of period		378,548			87,492			279,095			86,608
Cash and cash equivalents, end of period	$	427,043		$	122,949		$	427,043		$	122,949

salesforce.com, inc.

Additional Metrics

(Unaudited)

	July 31, 2008			April 30, 2008			Jan 31, 2008			Oct 31, 2007			Jul 31, 2007		Apr 30, 2007
Full Time Equivalent Headcount		3,046			2,864			2,606			2,461			2,302		2,243
Financial data (in thousands):
Cash, cash equivalents and marketable securities	$	823,417		$	750,633		$	669,800		$	571,003		$	497,191	$	448,071
Deferred revenue, current and non-current	$	479,546		$	470,297		$	480,894		$	340,808		$	321,852	$	295,672
	Three Months Ended July 31,						Six Months Ended July 31,
	2008			2007			2008			2007
Revenues by geography (in thousands):
Americas	$	188,563		$	133,343		$	366,934		$	257,795
Europe		49,356			29,160			94,520			54,734
Asia Pacific		25,158			14,076			49,245			26,462
	$	263,077		$	176,579		$	510,699		$	338,991
As a percentage of total revenues:
Revenues by geography:
Americas		72	%		76	%		72	%		76	%
Europe		19			16			19			16
Asia Pacific		9			8			9			8
		100	%		100	%		100	%		100	%

EX-99.2

EXHIBIT 99.2

FOR IMMEDIATE RELEASE

Media Contact:

Erin O’Keeffe

salesforce.com

415-536-6150

eokeeffe@salesforce.com

Salesforce.com Acquires InStranet, Bringing Industry-Leading Knowledge

Base Technology to Salesforce CRM Customer Service & Support

Accelerates salesforce.com’s momentum in the enterprise call center market,

adding game-changing technology and 350,000 global call center agents

Powerful knowledge base Dimensions technology rapidly delivers the right

answer to customers and service agents

Company adds industry leaders Comcast, Expedia, Orange, Royal and Sun

Alliance, Vimpelcom, and Volkswagen Credit to the thousands of companies

using Salesforce CRM Customer Service & Support

SAN FRANCISCO – August 20, 2008 – Salesforce.com [NYSE: CRM], the market and technology leader in Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS), today announced the acquisition of InStranet, the leading provider of knowledge management technology for business to consumer (B2C) call centers. The acquisition brings powerful knowledge base Dimensions technology to Salesforce CRM Customer Service & Support, enabling customers and call center agents around the world to quickly find the answer they need, the first time. The addition of this game-changing technology and approximately 350,000 global call center agents aggressively accelerates the momentum of Salesforce CRM Customer Service & Support in the growing customer service and support market, which is currently estimated at $3.4 billion by Gartner (Gartner, Market Trends: CRM Software, Worldwide, 2007-2012, March 31, 2008).

“I’d like to welcome the InStranet team to salesforce.com,” said Marc Benioff, chairman and CEO at salesforce.com. “We’re excited to add this unmatched technology to our SaaS applications and Force.com platform. Not only will it make our service and support offering stronger for our customers and further their success, but it will help catapult our growth in the customer service and support space.”

“Delivering our technology as a service had become a key focus for us due to strong interest from our customers,” said Alex Dayon, founder and CEO of InStranet. “This is an exciting opportunity for all of us at InStranet, and will be a huge leap forward for the SaaS market.”

“This acquisition gives Salesforce CRM Customer Service & Support unique technology that provides a better approach to knowledge base management,” said Sheryl Kingstone, director, Enterprise Research at Yankee Group. “And the timing is ripe - companies have been asking for a better way to organize their corporate knowledge to serve customers, and this acquisition will help salesforce.com differentiate itself from the competition.”

The Customer Service and Support Market Opportunity - Turning Agents into Brand Champions and Customers into Evangelists

Among the top five providers of customer service applications, salesforce.com was the fastest growing by revenue in 2007 (Source: IDC, “Worldwide Customer Service Applications 2008 Vendor Shares: Economic Uncertainty Will Drive Service Applications,” Doc # 213028, July 2008). Thousands of customers around the world such as Qualcomm, Transunion, Corporate Express, and Misys have already standardized on Salesforce CRM Customer Service & Support. According to Gartner, at least 75% of customer contact centers will use a form of SaaS by 2013 (Gartner, Magic Quadrant for CRM Customer Service Contact Centers, Maoz, March 19, 2008).

Traditional customer service and support vendors’ “search and hope” approach using keyword search technology has been riddled with failure: Customers struggle because they can’t find the right answer to their questions through Web-based self-service portals, and call center agents are more challenged than ever to help customers due to the large amount and complexity of information buried in their knowledge bases. According to IDC, searchers fail to find what they are looking for 30-50% of the time (Source: IDC, “Microsoft Buys Powerset Up the Web Search Ante,” Doc # lcUS 21330608, July 2008).

InStranet has solved the customer service and support challenge by taking a completely different approach to knowledge base management through its patented knowledge base Dimensions technology, which adds the customer’s context, such as product or geography, to the knowledge base to quickly hone in on the right solution and eliminate irrelevant search results. This powerful technology provides call center agents with accurate answers to customer questions at an unmatched speed and greatly improves customers’ Web-based self-service experience, drastically reducing the number of calls to call center agents by frustrated customers. Given that Yankee Group estimates that a customer service call costs $5.50 on average (Yankee Group, Great Expectations: Self Service Success Can Happen, Kingstone, May 2006), InStranet’s customers are saving money and providing higher levels of customer satisfaction.

In addition, because of the technology’s open architecture, it provides rapid time to value, with deployments taking place in weeks as opposed to months. This approach has found tremendous customer success in the most demanding enterprises, including some of the world’s largest call centers supporting more than 35,000 agents. Salesforce.com is adding this technology innovation as a key component to Salesforce CRM Customer Service & Support, enhancing its Call Center and Customer Portal applications in use today by thousands of companies around the world.

“Salesforce CRM Customer Service & Support has already revolutionized our support centers by bringing the benefits of SaaS to our support personnel around the globe,” said Peter Rubenacker, vice president, Information Technology, Qualcomm. “The addition of this knowledge base Dimensions technology provides a valuable extension of their platform.”

“This technology has had a significant impact on our ability to rapidly launch new clients and maximize our agents’ efficiency. Our 7,000 customer service representatives use the solution on a daily basis, and I see further growth potential,” said Alan Giles, CTO, Transcom. “InStranet discovered how to filter out the noise created by the explosion of information that customers and agents must navigate. The combination of InStranet’s technology and Salesforce CRM makes a lot of sense.”

Salesforce.com Acquires InStranet

Salesforce.com’s acquisition of InStranet closed on August 4, 2008, for approximately $31.5 million, which includes the assumption of $4.2 million in cash on InStranet’s balance sheet. This acquisition does not have an impact on salesforce.com’s results for the second quarter of fiscal year 2009, which will be announced later today.

InStranet is headquartered in Chicago, IL, with most of its operations in Paris, France. As part of its ongoing commitment to customer success, salesforce.com will continue to support InStranet customers and plans to fully integrate the seasoned InStranet management team and employees.

Additional information will be available during salesforce.com’s quarterly results call scheduled for 2:00pm PT/5:00 pm/ET today. Press, analysts, and investors may access the event by visiting http://www.salesforce.com/investor.

About Salesforce.com

Salesforce.com is the market and technology leader in Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS). The company’s portfolio of SaaS applications, including its award-winning CRM application, available at http://www.salesforce.com/products/, has revolutionized the ways that customers manage and share business information over the Internet. The company’s Force.com PaaS enables customers, developers and partners to build powerful on-demand applications that deliver the benefits of multi-tenancy across the enterprise. Applications built on the Force.com platform, available at http://www.force.com, can be easily shared, exchanged and installed with a few simple clicks via salesforce.com’s AppExchange marketplace available at http://www.salesforce.com/appexchange.

As of April 30, 2008, salesforce.com manages customer information for approximately 43,600 customers including ABN AMRO, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, Sprint Nextel, and SunTrust Banks. 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 in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM”. For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

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“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about our acquisition of InStranet, Inc., including statements about the market for InStranet and salesforce.com products and services and the growth of the customer service and support and knowledge base and knowledge management markets, the achievement of which involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our 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 the integration of InStranet, and its technology, rates of growth in the customer service and support and knowledge base and knowledge management markets, acceptance by customers and partners of the solutions of the combined companies and our ability to retain and motivate InStranet employees.

Further information on these and other factors 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 our Form 10-Q that will be filed for the quarter ended July 31, 2008 and our Form 10-K for the fiscal year ended January 31, 2008. These documents are available on the SEC Filings section of the Investor Information section of our 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.

Copyright (c) 2008 salesforce.com, inc. All rights reserved. Salesforce and the “no software” logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.