Netsuite (NYSE: N) is the corporate Facebook.com

People are quite dependent on Facebook.com for maintaining their "social status" among their friends.  Among the many features Facebook.com has to offer: it tracks where your friends are located at the moment, stores and shares pictures where people can tag and link relationships, and maintains up-to-date contact information for those on your friends list.  The advantage of having your information in a cloud is that you don't need to access your computer at all, but simply an internet browser to access Facebook.com.  Another advantage is you don't have to install any software and maintain it on your computer, which can be troublesome especially with dysfunctional OS updates and poor file management.  (Some of my friends/co-workers have the worst computers with buggy applications and messy desktops!)

What if this application concept could be applied to the corporate world in terms of how companies track their relationships with customers?  This is what Customer Relation Management (CRM) software maker Netsuite (NYSE: N) does.  In addition to CRM capabilities, Netsuite provides Accounting/Enterprise Resource Planning (ERP) and e-commerce software that enable businesses to manage their critical back-office, front-office, and Web operations in a single application.  This new "cloud" computing model streamlines a companies operations simply because a business can now concentrate solely on its sales instead of spending precious profit on maintaining its own applications in house which can become costly and outdated.  

So how is Netsuite as an investment?  =)

Netsuite's competitor, Salesforce.com, already has a running start in the cloud computing CRM industry being named on Forbes 25 Fastest Growing Tech Companies.  Salesforce.com went IPO back in 2004, now boasts a Market Cap of $3.28B with an EPS of 0.30 (not to mention $300M in cash with $0 debt).  I beleive this market is big enough for 2 players (just look at Coke vs Pepsi or Yahoo vs Google) and Netsuite has room to grow.  Netsuite went IPO only last year (Dec 2007) and currently has a Market Cap of $590M.  It recently reported its first profitable quarter of 0.01 EPS and also has cash ($123M) with no debt.  This clearly tells me that both companies keep a clean accounting sheet and understand how to make money.  Only time will tell if Netsuite can possibly catch Salesforce.com and maybe surpass it!