1134203--3/14/2008--TALEO

related topics

{system, service, information}

{product, market, service}

{property, intellectual, protect}

{regulation, change, law}

{cost, operation, labor}

{operation, international, foreign}

{control, financial, internal}

{acquisition, growth, future}

{customer, product, revenue}

{personnel, key, retain}

{condition, economic, financial}

{provision, law, control}

{stock, price, operating}

If our efforts to attract new customers are not successful, our revenue growth will be adversely affected. Unfavorable economic conditions and reductions in information technology spending could limit our ability to grow our business. If we do not compete effectively with companies offering talent management solutions, our revenue may not grow and could decline. The mergers of or potential mergers of our competitors or other similar strategic alliances could weaken our competitive position or reduce our revenue. In connection with the December 31, 2005 year-end audit we identified deficiencies in our internal control over financial reporting that led us to restate our consolidated financial statements and we cannot be certain restatements will not occur again. Failure to implement and maintain the appropriate internal controls over financial reporting could negatively affect our ability to provide accurate and timely financial information. Our financial performance may be difficult to forecast as a result of our historical focus on large customers and the long sales cycle associated with our solutions. If we fail to develop or acquire new products or enhance our existing products to meet the needs of our existing and future customers, our sales will decline. Acquisitions and investments present many risks, and we may not realize the anticipated financial and strategic goals for any such transactions, which would harm our business, operating results and overall financial condition. In addition, we have limited experience in acquiring and integrating other companies. We are discontinuing the time and expense processing services of our Taleo Contingent solution and intend to provide time and expense processing services to our current customers only through the expiration of their current agreements. We may have difficulty replacing the revenue from these customers. We may lose sales opportunities if we do not successfully develop and maintain strategic relationships to sell and deliver our solutions. If we are required to reduce our prices to compete successfully, our margins and operating results could be adversely affected. If our security measures are breached and unauthorized access is obtained to customer data, customers may curtail or stop their use of our solutions, which would harm our reputation, operating results, and financial condition. Defects or errors in our products could affect our reputation, result in significant costs to us and impair our ability to sell our products, which would harm our business. We participate in a relatively new and evolving market for talent management software and services, which increases the difficulty of evaluating the effectiveness of our current business strategy and future prospects. If acceptance of the vendor hosted, or on-demand, delivery model does not continue to develop, or develops more slowly than we expect, our business may be harmed. If we fail to manage our hosting infrastructure capacity satisfactorily, our existing customers may experience service outages and our new customers may experience delays in the deployment of our solution. Any significant disruption in our computing and communications infrastructure could harm our reputation, result in a loss of customers and adversely affect our business. We must hire and retain key employees and recruit qualified personnel or our future success and business could be harmed We currently derive a significant portion of our revenue from international operations outside of North America and expect to expand our international operations. However, we do not have substantial experience in international markets, and may not achieve the expected results. Fluctuations in the exchange rate of foreign currencies could result in currency transaction losses, which could harm our operating results and financial condition. If we fail to defend our proprietary rights aggressively, our competitive advantage could be impaired and we may lose valuable assets, experience reduced revenue, and incur costly litigation fees to protect our rights. Current and future litigation against us could be costly and time consuming to defend. Our results of operations may be adversely affected if we are subject to a protracted infringement claim or a claim that results in a significant award for damages. We employ technology licensed from third parties for use in or with our solutions, and the loss or inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which would adversely affect our business. Difficulties that we may encounter in managing changes in the size of our business could affect our operating results adversely. Failure to manage our customer deployments effectively could increase our expenses and cause customer dissatisfaction. Our reported financial results may be adversely affected by changes in generally accepted accounting principles or changes in our operating history that impact the application of generally accepted accounting principles. If tax benefits currently available under the tax laws of Canada and the province of Quebec are reduced or repealed, or if we have taken an incorrect position with respect to tax matters under discussion with the Canadian Revenue Agency or other taxing authorities, our business could suffer. Evolving regulation of the Internet may increase our expenditures related to compliance efforts, which may adversely affect our financial condition. If we fail to develop our brand cost-effectively, our customers may not recognize our brand and we may incur significant expenses, which would harm our business and financial condition. Our stock price is likely to be volatile and could decline. We may need to raise additional capital, which may not be available, thereby adversely affecting our ability to operate our business. Provisions in our charter documents and Delaware law may delay or prevent a third party from acquiring us.

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1134203--3/14/2008--TALEO_CORP