Salesforce.com Monetizes AppExchange, Autobytel Names Stibel to Board

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Salesforce.com Monetizes AppExchange, Autobytel Names Stibel to Board

By David Sims
david@firstcoffee.biz

The news as of the first coffee this morning, and the music is the current selection in the iTunes Christmas shuffle -- Brenda Lee's "Rockin' Around the Christmas Tree." Like Bing Crosby's "White Christmas," hers is the only acceptable version of the song:

Confirming widespread media reports yesterday, salesforce.com has announced its AppStore "vision and monetization strategy for the AppExchange marketplace."

Customers will be able to use AppStore as "a single source for trying, buying and deploying on-demand applications on the AppExchange," company officials say.

AppStore will provide what salesforce.com officials say is "a complete package of commercial services and revenue-sharing programs for developers and partners," who will be able to use AppStore as a global distribution network to market, sell, invoice and deliver the applications they have built using the Apex programming language and platform and made available on the AppExchange.

Company officials hope the move will goose sluggish growth, and that "AppStore will be the catalyst to unlock the value of Apex and the AppExchange, accelerating the vision for the creation, delivery, and success of any application on demand."

The company has announced an increase in its revenue outlook for its full fiscal year 2008, saying they expect revenue to be in the range of $710 million to $720 million for its fiscal year ending January 31, 2008. On November 15, 2006, salesforce.com said that it expected FY08 revenue to be between $700 million and $710 million.

CEO Marc Benioff made the announcement, saying "in connection with the announcement of our AppStore strategy today, which we will roll out in phases over the next 12 months, we are raising our revenue expectations for fiscal year 2008."

Benioff will host a lunch meeting today at 12:00 p.m. (PST) /3:00 p.m. (EST) to discuss the AppStore strategy. A live audio and slide webcast will be available on salesforce.com's Investor Relations website at http://www.salesforce.com/investor.

Industry observer Aaron Ricadela says salesforce "expects to book an additional $10 million in revenues next year as a result of fees and sales of its software, generated by [this] new program for independent software developers."

Whether the company can "wring more revenue out of its online software marketplace will be closely watched by investors looking for the rapidly expanding company to return to even higher rates of growth." Says Ricadela.

"For customers, AppStore will make purchasing on-demand applications as easy as buying music on iTunes, and for partners, AppStore will remove the burden and expense of building out a sales and distribution channel," said Benioff, who has spoken frequently in the past of "the iTunes model" for selling software.

"From the moment we started talking about our vision of a marketplace of on-demand applications, the market has been asking 'What is salesforce.com's strategy to monetize the AppExchange?' AppStore is the answer," he said.

AppExchange, an on-demand application marketplace, has more than 20,000 applications installs by over 7,400 salesforce.com customers in 57 countries, according to company officials, who say the service is "extending the benefits of on-demand applications beyond CRM to recruiting, IT, human resources, legal and all areas of the enterprise." More than 430 applications from over 230 partners are available today on the AppExchange.

The way salesforce.com sees it, on AppStore "a growing community of customers draws more developers and partners into the ecosystem; the development capabilities enabled by the Apex platform and language expand the range of applications available on the AppExchange; the growing diversity of applications inspires existing customers to expand their deployments and helps drive more subscriber growth."

The company hopes that as customers deploy more on-demand applications and customizations, they upgrade to premium salesforce.com offerings and services such as Unlimited Edition.

Next up for the vendor is The AppStore Referral Program and AppStore Checkout. The way they explain it, AppStore will provide commerce, marketing and referral services "that enable developers and partners to offer a seamless experience to salesforce.com customers."

Basically it adds a zero-touch, self-service channel model that manages billing, invoicing and renewals across multiple currencies and languages, and will introduce services and programs including different revenue sharing models.

Salesforce.com will provide AppStore services to partners for a revenue share percentage of closed deals that will vary depending on the level of services provided. AppStore services, including the AppStore Referral Program and AppStore Checkout, are currently scheduled to be offered in a phased approach throughout 2007.

The AppStore Referral Program will provide access to marketing services intended to increase demand for partners' AppExchange products. The Referral Program will be offered at two levels:

"Standard Referral" gives you premium placement on searches and AppExchange categories, marketing program and event eligibility and benefits, incubator eligibility and requires a 10 percent referral fee on all closed transactions.

"Premium Referral" provides all of the above benefits plus demand generation programs, structured seminars to educate salesforce.com customer-facing employees and a premium listing on AppExchange. Companies must meet certain eligibility requirements to participate, and it requires 25 percent referral fee on closed transactions.

Program and service availability is currently scheduled for Q3 of calendar 2007.

"AppStore Checkout" will provide commercial services including online ordering, billing, invoicing and collection services. It costs a 20 percent commission on all amounts invoiced on an ongoing basis, and will be offered separately from the AppStore Referral. The program and commissions will be independent, and are currently scheduled for Q4 of calendar 2007.


Autobytel Inc. has announced the appointment of Jeffrey M. Stibel, President and CEO of Web.com, to its board of directors. Stibel's term on the board begins immediately.

Autobytel President and CEO Jim Riesenbach said Stibel's recent experience and "progress in turning around and revitalizing Web.com will be of great value to the Board as we continue on our mission to restore growth and profitability."

Mr. Stibel currently serves as President and CEO of Web.com, a vendor of websites and web services that has built more than 4 million websites for small businesses and consumers.

Prior to Web.com, Stibel served as Senior Vice President and General Manager overseeing the Web Services division of United Online. Before United Online, he was a founder and served as Chairman and CEO of search and marketing technology company Simpli.com, which was sold to ValueClick.

Stibel received a master's degree from Brown University and studied business and brain science at MIT's Sloan School of Management and at Brown University, where he was a Brain and Behavior Fellow.

So if somebody says "Hey guys, this CRM stuff isn't exactly brain surgery," we can ask Stibel whether it is or not.

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