New IPO: Salesforce.com

Shares of the San Francisco-based CRM vendor, which delivers its software by subscription, started at $11 at the opening bell. Salesforce.com originally had set a $7.50 to $8.50 range for its 10 million shares but repriced the stock immediately before its public debut, bringing it in line with many of the IPOs launched during the dot-com heyday.

And as with most of those earlier IPOs, Salesforce.com has been experiencing revenue gyrations. According to the latest S1 form Salesforce.com filed with the Securities and Exchange Commission, the company has recorded quarterly operating income of up to $4.3 million and quarterly losses as high as $4.9 million during the past two years.

For its fiscal 2005 first quarter, the software vendor reported earnings of $437,000 on revenue of $34.8 million.

About 40 percent of Salesforce.com's business comes from companies with fewer than 20 employees. That small-business emphasis could pose a problem for the company, which said those subscribers have "higher attrition rates and shorter subscription periods." In fact, Salesforce.com's most recent SEC filing said the company's survival depends on attracting a greater share of the midsize- and large-business market. That upmarket target pits Salesforce.com squarely against the likes of Siebel Systems and Salesnet.

"Once they are public, they become subject to all of the scrutiny a public company must undergo. So I, for one, am looking forward to their being subject to that financial scrutiny," said Ken Rudin, vice president and general manager of Siebel CRM OnDemand. "For us, the bottom line is this doesn't change our strategy at all."

Salesforce.com has become a marketing phenomenon in almost equal measure for both its gregarious CEO, Marc Benioff--who delights in publicly tweaking larger, more- established CRM vendors--as for its business model of selling CRM software as a service.

But it was Benioff's love of the spotlight that caused the most recent delay to Salesforce.com's IPO. He had allowed a New York Times reporter to follow him around for a subsequent article, potentially violating the SEC-imposed quiet period. Until then, Salesforce.com had planned to go public May 13, its filings show.