The non-story out of Salesforce.com this week got me thinking and reading a little more and it would seem that many others are starting to see the writing on the wall for sf.com and it ain't pretty.  Joshua Greenbaum's story for ZDNet was the most compelling.  He's apparently got an out-and-out death watch going for Salesforce.com. 

"But the wagons are circling, and so far Marc’s only chance for turning things around is so unsuccessful that he’s resorted to bluster and BS about what’s really happening."

Reporting on the success of sf.com's platform play has also not been pretty.  Phil Wainewright also on ZDNet says:

"None of this bodes well for Salesforce.com's platform ambitions. These are the partners who will help it penetrate the serious enterprise marketplace. However much AppExchange proves its worth as an online shopping mall for on-demand applications, it won't prove its platform credentials unless it can build similar momentum amongst partners that are integrating at an API level. Currently, I'm hearing far more in the way of disgruntlement than enthusiasm from those partners."

Sinclair Schuller also wrote about this on SaaSBlogs.

So you would think that investors are starting to see this.  A quick peek at sf.com's stock shows some pretty interesting stuff.  I preface all this with a note that I am by no means an investment expert.  Far from it, in fact.  Other than the Microsoft stock I get from an ESPP plan I only own mutual funds.  I'm just a poor schlub trying to make sense out of some pretty strange numbers.  Having said that I point out some weirdness that the market seems to have built into the sf.com's stock.  Their revenue is listed at $554M and income at $1.44M.  Hmmm...  So their Earnings/Share is at $0.01.  The stock price closed this week at $46.25 giving them a market cap of $5.34B.  Doing the math around that would seem to have them completely upside down.  Their P/E ratio is over 3800!!!  What tha?  For comparison, their main competitors have PE ratios as follows:  Oracle - 25, SAP - 23, Microsoft - 21.  Hmmm.  Ok.  I'm sure if you ask Mr. Benioff he'd tell you that sf.com is not a software company. Uh, yeah right!  Whatever.  Anyway doing the same comparison against other web companies doesn't make it any prettier.  The PE for the following companies clearly show that:   Google - 44, Yahoo - 53, and IAC is at 50.  So are investors selling?  Some of them are.  Benioff himself has been selling 20,000 shares a day since November.  Nice work if you can get it.  smile_regular

So what do you think?  Is sf.com a bubble about to burst?  Are you a sf.com partner looking for a platform to build a business on?  We should talk.

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