##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number:
    000-51299
  TALEO CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

52-2190418(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

Identification
    Number)   4140
    Dublin Boulevard, Suite 400
    Dublin, California 94568 (Address
    of principal executive offices, including zip
    code)
  (925) 452-3000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredClass A Common Stock, $0.00001 par value

The Nasdaq Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K Form 10-K.




---



##### 





TALEO
    CORPORATION
  FORM 10-K
  TABLE OF CONTENTS
   
 PART IITEM 1


Business


1ITEM 1A


Risk Factors


12ITEM 1B


Unresolved Staff Comments


26ITEM 2


Properties


26ITEM 3


Legal Proceedings


26ITEM 4


Submission of Matters to a Vote of Security
    Holders


27PART IIITEM 5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


27ITEM 6


Selected Financial Data


30ITEM 7


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


31ITEM 7A


Quantitative and Qualitative Disclosures About
    Market Risk


47ITEM 8


Financial Statements and Supplementary Data


48ITEM 9


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


85ITEM 9A


Controls and Procedures


85ITEM 9B


Other Information


85PART IIIITEM 10


Directors, Executive Officers and Corporate
    Governance


86ITEM 11


Executive Compensation


86ITEM 12


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


86ITEM 13


Certain Relationships and Related Transactions,
    and Director Independence


86ITEM 14


Principal Accounting Fees and Services


86PART IVITEM 15


Exhibits, Financial Statements Schedules


86Signatures


87EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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##### Table of Contents



FORWARD-LOOKING
    INFORMATION
  This
    Form 10-K,
    including Part I, Item 1  Business and
    Part II, Item 7  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations, contains forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended, and Section 21E of the Securities Exchange Act of
    1934, as amended. These statements identify prospective
    information, particularly statements referencing our
    expectations regarding revenue and operating expenses, cost of
    revenue, tax and accounting estimates, cash, cash equivalents
    and cash provided by operating activities, the discontinuation
    of our time and expense processing services related to our Taleo
    Contingent solution, the opening of additional data centers, the
    demand and expansion opportunities for our products, our
    customer base and our competitive position. In some cases,
    forward-looking statements can be identified by the use of words
    such as may, could, would,
    might, will, should,
    expect, forecast, predict,
    potential, continue,
    anticipates, expects,
    intends, plans, believes,
    seeks, estimates, is scheduled
    for, targeted, and variations of such words
    and similar expressions. Such forward-looking statements are
    based on current expectations, estimates, and projections about
    our industry, managements beliefs, and assumptions made by
    management. These statements are not guarantees of future
    performance and are subject to certain risks, uncertainties and
    assumptions that are difficult to predict; therefore, actual
    results and outcomes may differ materially from what is
    expressed or forecasted in any such forward-looking statements.
    Such risks and uncertainties include those set forth herein
    under Part I, Item 1A  Risk Factors or
    included elsewhere in this Annual Report on
    Form 10-K.
    Unless required by law, we undertake no obligation to update
    publicly any forward-looking statements, whether as a result of
    new information, future events or otherwise.
  ITEM 1.
    BUSINESS  Overview
      tm tm
  (925) 452-3000, www.taleo.com
 1




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The
    Talent Management Market
      time-per-hire
  Our
    Software-as-a-Service Delivery Model
      Our
    Products
  end-to-end
   2




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Taleo
    Enterprise Edition
    Taleo
    Recruiting
    Taleo
    Professional tm non-hourly
  Taleo
    Hourly tm
    Taleo
    Agency tm
  Taleo
    Assessment tm
  Taleo
    Campus tm
  Taleo
    Compliance tm
  Taleo
    Contingent tm
  Taleo
    Onboarding tm
  Taleo
    Passport tm
  Taleo Scheduling
    Center tm
  Taleo
    TalentReach tm
 3




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##### Table of Contents



Taleo
    Verify tm
  Taleo Workforce
    Mobility tm
  Taleo
    Performance
    Taleo Performance
    Management tm
  Taleo Goals
    Management tm
  Taleo Succession
    Planning tm
  Taleo Career
    Management tm
  Talent
    Management Platform Modules
    Taleo
    Connect tm
  Taleo Reporting and
    Analytics tm
  Taleo
    Business Edition
    Taleo Business Edition 
    Personal tm
  Taleo Business Edition 
    Standard tm
  Taleo Business Edition 
    Plus tm
 4




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Taleo Business Edition 
    Premium tm
  Technology
  Our
    Software Applications
  tm
      Our
    On-Demand Infrastructure
  open-source
   5




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on-site
  Professional
    Services
    Taleo
    Services Methodologies
    Taleo Implementation Methodology. on-boarding
  Talent Practices Knowledge Base.
  Implementation
    Services
   6




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Solution
    Optimization
    Technical
    Services
  on-site
  Training
  Taleo University
  Customer
    Support
  e-mail
  Our
    Growth Strategy
    Extend our Technology Leadership.
  Expand our Solution Offerings.
 7




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Expand our Multinational Presence.
  Expand our Target Market Opportunity.
  Customers
    Sales and
    Marketing
      Research
    and Development
   8




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Competition
    
    Product performance and functionality;
    Breadth and depth of functionality;
    Ease of implementation and use;
    Security and data privacy;
    Success of the on-demand, or software-as-a-service, business
    model;
    Ability to integrate with third-party solutions;
    Scalability and reliability;
    Company reputation; and
    Price.      Intellectual
    Property
     9




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Employees
    Business
    Combinations
     
 Date of Closing

Company

DetailsJuly 3, 2007

Wetfeet, Inc. (Wetfeet)

Taleo acquired certain assets associated with the Wetfeet hiring
    management solution, including customer contracts, from Wetfeet,
    Inc. and its parent Universum Communications Holdings, Inc.March 7, 2007

JobFlash, Inc. (JobFlash)

Taleo acquired certain assets of JobFlash, Inc., including
    customer contracts and intellectual property related to hourly
    hiring management, scheduling management and voice recognition
    tools for hiring management. The assets acquired provided the
    basis for our Taleo Scheduling Center solution and hourly hiring
    management tools for our Taleo Business Edition solution.March 10, 2005

Recruitforce.com, Inc. (Recruitforce)

The Recruitforce acquisition provided an on-demand hiring
    management system specifically designed for smaller
    organizations. We used the intellectual property acquired
    through the Recruitforce acquisition to build Taleo Business
    Edition.   Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, (www.taleo.com) 1-800-SEC-0330.
 10




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www.sec.gov
  EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Name

Age

PositionMichael Gregoire


42


President, Chief Executive Officer and DirectorJeffrey Carr


49


Executive Vice President, Global Alliances and Americas SalesGuy Gauvin


40


Executive Vice President, Global ServicesKaty Murray


39


Executive Vice President and Chief Financial Officer   Michael Gregoire
  Jeffrey Carr
  Guy Gauvin
  Katy Murray
 11




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ITEM 1A.
    RISK
    FACTORS  of the following factors, as well as other variables
    affecting our operating results and financial condition, past
    performance may not be a reliable indicator of future
    performance, and historical trends should not be used to
    anticipate results or trends in future periods.
  We
    have a history of losses, and we cannot be certain that we will
    sustain profitability.
    If our
    existing customers do not renew their software subscriptions and
    buy additional solutions from us, our business will
    suffer.
    
    the price, performance and functionality of our solutions;
    the availability, price, performance and functionality of
    competing products and services;
    the effectiveness of our maintenance and support services;
    our ability to develop complementary products and
    services; and
    the stability, performance and security of our hosting
    infrastructure and hosting services.    Because
    we recognize revenue from software subscriptions over the term
    of the agreement, a significant downturn in our business may not
    be reflected immediately in our operating results, which
    increases the difficulty of evaluating our future financial
    position.
   12




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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.
   13




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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.
   14




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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.
    
    the complex nature of our solutions;
    the need to educate potential customers about the uses and
    benefits of our solutions;
    the relatively long duration of our contracts;
    the discretionary nature of our customers purchase and
    budget cycles;
    the competitive evaluation of our solutions;
    fluctuations in the staffing management requirements of our
    prospective customers;
    announcements or planned introductions of new products by us or
    our competitors; and
    the lengthy purchasing approval processes of our prospective
    customers.    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.
   15




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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.
    
    being unable to achieve the anticipated benefits from our
    acquisitions;
    discovering that we may have difficulty integrating the
    accounting systems, operations, and personnel of the acquired
    business, and may have difficulty retaining the key personnel of
    the acquired business;
    our ongoing business and managements attention may be
    disrupted or diverted by transition or integration issues and
    the complexity of managing geographically and culturally diverse
    locations;
    difficulty incorporating the acquired technologies or products
    into our existing code base;
    problems arising from differences in the revenue, licensing or
    support model of the acquired business;
    customer confusion regarding the positioning of acquired
    technologies or products;
    difficulty maintaining uniform standards, controls, procedures
    and policies across locations;
    difficulty retaining the acquired business
    customers; and
    problems or liabilities associated with product quality,
    technology and legal contingencies.   16




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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.
   17




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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.
      
    lost or delayed market acceptance and sales of our products;
    loss of customers;
    product liability suits against us;
    diversion of development and support resources;
    injury to our reputation; and
    increased maintenance and warranty costs.    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.
  on-demand
 18




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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.
    
    human error;
    physical or electronic security breaches;
    telecommunications outages from third-party providers;
    computer viruses;
    acts of terrorism or sabotage;
    fire, earthquake, flood and other natural disasters; and
    power loss.     19




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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.
    
    unexpected changes in regulatory requirements, taxes, trade
    laws, tariffs, export quotas, custom duties or other trade
    restrictions;
    differing regulations in Quebec with regard to maintaining
    operations, products and public information in both French and
    English;
    differing labor regulations, especially in the European Union
    and Quebec, where labor laws are generally more advantageous to
    employees as compared to the United States, including deemed
    hourly wage and overtime regulations in these locations;
    more stringent regulations relating to data privacy and the
    unauthorized use of, or access to, commercial and personal
    information, particularly in Europe and Canada; 20




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
    reluctance to allow personally identifiable data related to
    non-U.S. citizens
    to be stored in databases within the United States, due to
    concerns over the United States governments right to
    access personally identifiable data of
    non-U.S. citizens
    stored in databases within the United States or other concerns;
    greater difficulty in supporting and localizing our products;
    greater difficulty in localizing our marketing materials and
    legal agreements, including translations of these materials into
    local language;
    changes in a specific countrys or regions political
    or economic conditions;
    challenges inherent in efficiently managing an increased number
    of employees or independent contractors over large geographic
    distances, including the need to implement appropriate systems,
    policies, benefits and compliance programs;
    limited or unfavorable intellectual property protection; and
    restrictions on repatriation of earnings.    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.
   21




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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.
    
    require costly litigation to resolve and the payment of
    substantial damages;
    require significant management time;
    cause us to enter into unfavorable royalty or license agreements;
    require us to discontinue the sale of our products;
    require us to indemnify our customers or third-party service
    providers; or
    require us to expend additional development resources to
    redesign our products.        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.
   22




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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.
   23




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##### Table of Contents



Other
    Foreign Tax Examinations.
    Evolving
    regulation of the Internet may increase our expenditures related
    to compliance efforts, which may adversely affect our financial
    condition.
   24




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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.
    
    Our operating performance and the performance of other similar
    companies;
    The overall performance of the equity markets;
    developments with respect to intellectual property rights;
    publication of unfavorable research reports about us or our
    industry or withdrawal of research;
    coverage by securities analysts or lack of coverage by
    securities analysts;
    speculation in the press or investment community;
    general economic conditions and data and the impact of such
    conditions and data on the equity markets;
    terrorist acts; and
    announcements by us or our competitors of significant contracts,
    new technologies, acquisitions, commercial relationships, joint
    ventures, or capital commitments.  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.
   25




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES            ITEM 3.
    LEGAL
    PROCEEDINGS     26




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##### Table of Contents



ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowFor the year ended December 31, 2007Fourth quarter

$
33.97


$
24.07Third quarter


26.07



20.23Second quarter


22.54



15.25First quarter


16.82



12.06For the year ended December 31, 2006Fourth quarter

$
13.99


$
10.01Third quarter


11.87



7.85Second quarter


14.63



11.01First quarter


14.81



12.04    27




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Issuer
    Purchases of Equity Securities(1)
  Total Number of


Maximum DollarShares Purchased as


Value of SharesPart of Publicly


that May Yet BeTotal Number of


Price


Announced Plans


Purchased underPeriod

Shares Purchased


Paid per Share


or Programs


the Plans or ProgramsJanuary 1, 2007 through January 31, 2007


12,618


$
13.20







February 1, 2007 through February 28, 2007














March 1, 2007 through March 31, 2007














April 1, 2007 through April 30, 2007


7,405


$
16.97







May 1, 2007 through May 31, 2007














June 1, 2007 through June 30, 2007














July 1, 2007 through July 31, 2007


6,892


$
23.00







August 1, 2007 through August 31, 2007














September 1, 2007 through September 30, 2007














October 1, 2007 through October 31, 2007


7,763


$
25.09







November 1, 2007 through November 30, 2007














December 1, 2007 through December 31, 2007














34,678


$
18.61
(2)






     (1)
    
    In connection with our restricted stock and performance share
    agreements approved by the Board of Directors on May 31,
    2006, we repurchase common stock from employees as consideration
    for the payment of required withholding taxes.(2)
    
    Represents the weighted average price per share purchased during
    the year ended December 31, 2007.  Dividend
    Policy
   28




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Use of
    Proceeds from Public Offerings
  Initial
    Public Offering
  Form S-1 No. 333-114093)
  Stock
    Performance Graph
    COMPARISON OF 27 MONTH CUMULATIVE TOTAL RETURN*
 Among Taleo Corporation, The NASDAQ Composite Index
 And The NASDAQ Computer & Data Processing Index
  
  *
    
    $100 invested on 9/28/05 in stock or 8/31/05 in index-including
    reinvestment of dividends. Fiscal year ending December 31.

Information used in the graph was obtained from a third party
    investment research firm, a source believed to be reliable, but
    we are not responsible for any errors or omissions in such
    information.The stock performance graph shall not be deemed
    filed for purposes of Section 18 of the
    Securities Exchange Act of 1934, as amended, or otherwise
    subject to the liabilities under that Section, and shall not be
    deemed to be incorporated by reference into any filing of Taleo
    under the Securities Act of 1933, as amended, or the Exchange
    Act. 29




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ITEM 6.
    SELECTED
    FINANCIAL DATA  Financial Statements and
    Supplementary Data Managements Discussion and Analysis of Financial
    Condition and Results of Operations.
  Year Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Consolidated Statements of Operations Data(1):Revenue:Application

$
105,092


$
79,137


$
63,296


$
49,010


$
36,029Consulting


22,849



17,906



15,114



9,640



7,606Total revenue


127,941



97,043



78,410



58,650



43,635Cost of revenue:Application


22,602



19,317



16,419



14,627



7,691Consulting


18,026



12,785



11,058



8,276



6,462Total cost of revenue


40,628



32,102



27,477



22,903



14,153Gross profit


87,313



64,941



50,933



35,747



29,482Operating expenses:Sales and marketing


36,916



29,482



22,544



18,153



14,767Research and development


22,981



19,475



16,687



15,932



10,927General and administrative


23,734



21,113



10,725



7,096



4,726Restructuring charges






414



804







Charge for in-process research and development


















150Total operating expenses


83,631



70,484



50,760



41,181



30,570Operating income (loss)


3,682



(5,543
)


173



(5,434
)


(1,088
)Other income (expense):Interest income


3,045



2,891



873



101



83Interest expense


(137
)


(107
)


(1,273
)


(404
)


(152
)Fees for early extinguishment of debt










(2,264
)






(62
)Total other income (expense), net


2,908



2,784



(2,664
)


(303
)


(131
)Income (loss) before provision for income taxes


6,590



(2,759
)


(2,491
)


(5,737
)


(1,219
)Provision (benefit) for income taxes


2,707



(131
)


4



(11
)


(89
)Net income (loss)


3,883



(2,628
)


(2,495
)


(5,726
)


(1,308
)Accrual of dividends and issuance costs on preferred stock










(2,984
)


(3,299
)


(2,744
)Net income (loss) attributable to Class A common
    stockholders

$
3,883


$
(2,628
)

$
(5,479
)

$
(9,025
)

$
(4,052
)Net income (loss) attributable to Class A common
    stockholders per share  basic

$
0.16


$
(0.13
)

$
(1.19
)

$
(161.16
)

$
(162.08
)Net income (loss) loss attributable to Class A common
    stockholders per share  diluted

$
0.13


$
(0.13
)

$
(1.19
)

$
(161.16
)

$
(162.08
)Weighted-average Class A common shares  basic


24,116



20,031



4,619



56



25Weighted-average Class A common shares 
    diluted(2)


28,777



20,031



4,619



56



25   30




---



##### Table of Contents



December 31,2007


2006


2005


2004


2003(In thousands)Consolidated balance sheet data:Cash and cash equivalents

$
86,135


$
58,785


$
59,346


$
5,773


$
18,194Working capital (deficit)


69,911



57,795



58,497



(1,371
)


2,374Total assets


164,676



117,420



99,020



38,648



42,057Long-term debt(3)


878



17



399



2,573



216Total preferred stock and exchangeable share obligation


331



796



1,715



52,073



48,659Total stockholders equity (deficit)


102,108



77,430



71,698



(42,996
)


(34,427
)     (1)
    
    We acquired White Amber, Inc. in October 2003, Recruitforce.com,
    Inc. in March 2005, certain assets of JobFlash, Inc. in March
    2007 and certain assets of Wetfeet, Inc. in July 2007. Our
    consolidated statement of operations and balance sheet data
    include the results of White Amber, Inc., Recruitforce.com,
    Inc., JobFlash, Inc. and Wetfeet, Inc. only for periods
    subsequent to October 21, 2003, March 10, 2005,
    March 7, 2007 and July 3, 2007, respectively, see
    ITEM 7.  Managements Discussion and
    Analysis of Financial Condition and Results of Operationsand Note 3  Business Combinations in our
    notes to our consolidated financial statements for additional
    information regarding our acquisitions with respect to
    Recruitforce.com., Inc., JobFlash, Inc. and Wetfeet, Inc.(2)
    
    Exchangeable Shares, redeemable convertible preferred stock,
    stock options, and warrants are not included if antidilutive for
    the periods presented, see Note 8  Preferred
    Stock and Note 9  Common stock in our notes to
    our consolidated financial statements.(3)
    
    Includes long-term debt & capital leases related to
    production equipment and internal use software, see
    Note 12  Commitments and Contingencies in our
    notes to our consolidated financial statements  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATION    Overview
      Non-financial
 31




---



##### Table of Contents



Sources
    of Revenue
    Application
    Revenue
   32




---



##### Table of Contents



Consulting
    Revenue
    Cost of
    Revenue and Operating Expenses
  Cost
    of Revenue
      Sales
    and Marketing
   33




---



##### Table of Contents



Research
    and Development
    General
    and Administrative
    Employee
    Benefits
    Critical
    Accounting Policies and Estimates
      Revenue
    Recognition
    No. 00-3, Application of
 34




---



##### Table of Contents



97-2
    
    persuasive evidence of an agreement exists;
    delivery has occurred;
    fees are fixed or determinable; and
    the collection of fees is considered probable.  No. 00-21, Revenue Arrangements with Multiple Deliverables and/or
  Application
    Revenue
    
    fees paid for subscription services
    amortization of any related
    set-up fees
    amortization of fees paid for hosting services and software
    maintenance services under certain software license
    arrangements; and
    amortization of related consulting fees in certain multiple
    element subscription arrangements where VSOE does not exist for
    an undelivered element  No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Consulting
    Revenue
  time-and-materials
    Research
    and Development
  Accounting for the Costs of
    Computer Software to be Sold, Leased or Otherwise
    Marketed.
 35




---



##### Table of Contents



Stock-based
    Compensation
  Share-Based Payment Accounting for Stock-Based
    Compensation, Stock-Based Compensation
  Goodwill,
    Other Intangible Assets and Long-Lived Assets
  Goodwill and Other
    Intangible Assets,
  Accounting for the Impairment or
    Disposal of Long-Lived Assets,
  Income
    Taxes
     36




---



##### Table of Contents



Results
    of Operations
    Year Ended December 31,2007


2006


2005Consolidated Statement of Operations Data:Revenue:Application


82
%


82
%


81
%Consulting


18



18



19Total revenue


100



100



100Cost of revenue (as a percent of related revenue):Application


22



24



26Consulting


79



71



73Total cost of revenue (as a percent of total revenue)


32



33



35Gross profit


68



67



65Operating expenses:Sales and marketing


29



30



29Research and development


18



20



21General and administrative


18



22



14Restructuring










1Total operating expenses


65



72



65Operating income (loss)


3



(5
)


Other income (expense):Interest income


2



3



1Interest expense










(5
)Total other income (expense), net


2



3



(4
)Net income (loss) before provision for income taxes


5



(3
)


(3
)Provision (benefit) for income taxes


2







Net income (loss)


3
%


(3
)%


(3
)%  37




---



##### Table of Contents



Comparison
    of the Years Ended December 31, 2007 and 2006
    Revenue
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Application revenue

$
105,092


$
79,137


$
25,955



33
%Consulting revenue


22,849



17,906



4,943



28
%Total revenue

$
127,941


$
97,043


$
30,898



32
%       Cost
    of Revenue
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Application

$
22,602


$
19,317


$
3,285



17
%Consulting


18,026



12,785



5,241



41
%Total cost of revenue

$
40,628


$
32,102


$
8,526



27
%   employee-related
   38




---



##### Table of Contents



Gross
    Profit and Gross Profit Percentage
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Gross profitApplication

$
82,490


$
59,820


$
22,670



38
%Consulting


4,823



5,121



(298
)


(6
)%Total gross profit

$
87,313


$
64,941


$
22,372



34
%   Year EndedDecember 31,2007


2006


ChangeGross profit percentageApplication


78
%


76
%


2
%Consulting


21
%


29
%


(8
)%Total gross profit percentage


68
%


67
%


1
%       Operating
    expenses
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Sales and marketing

$
36,916


$
29,482


$
7,434



25
%Research and development


22,981



19,475



3,506



18
%General and administrative


23,734



21,113



2,621



12
%Restructuring costs and other charges






414



(414
)



*Total operating expenses

$
83,631


$
70,484


$
13,147



19
%     *
    
    not meaningful 39




---



##### Table of Contents



Sales and Marketing.
  Research and Development.
  General and Administrative.
  Restructuring charges.
  Contribution
    Margin
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Contribution Margin  application

$
59,509


$
40,345


$
19,164



48
%Contribution Margin  consulting


4,823



5,121



(298
)


(6
)%Contribution Margin  total

$
64,332


$
45,466


$
18,866



41
%    40




---



##### Table of Contents



Interest
    income and interest expense
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Interest income

$
3,045


$
2,891


$
154



5
%Interest expense


(137
)


(107
)


(30
)


28
%Total other income (expense), net

$
2,908


$
2,784


$
124



4
%   Interest Income.
  Interest Expense.
  Provision
    (Benefit) for Income Taxes
  Year EndedDecember 31,2007


2006


$ Change


% Change(In thousands)Provision (benefit) for income taxes

$
2,707


$
(131
)

$
2,838




*     *
    
    not meaningful    Comparison
    of the Years Ended December 31, 2006 and 2005
    Revenue
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Application revenue

$
79,137


$
63,296


$
15,841



25
%Consulting revenue


17,906



15,114



2,792



18
%Total revenue

$
97,043


$
78,410


$
18,633



24
%    41




---



##### Table of Contents



Cost
    of Revenue
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Application

$
19,317


$
16,419


$
2,898



18
%Consulting


12,785



11,058



1,727



16
%Total cost of revenue

$
32,102


$
27,477


$
4,625



17
%       Gross
    Profit and Gross Profit Percentage
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Gross profitApplication

$
59,820


$
46,877


$
12,943



28
%Consulting


5,121



4,056



1,065



26
%Total gross profit

$
64,941


$
50,933


$
14,008



28
%   Year EndedDecember 31,2006


2005


% ChangeGross profit percentageApplication


76
%


74
%


2
%Consulting


29
%


27
%


2
%Total gross profit percentage


67
%


65
%


2
%    42




---



##### Table of Contents



Operating
    expenses
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Sales and marketing

$
29,482


$
22,544


$
6,938



31
%Research and development


19,475



16,687



2,788



17
%General and administrative


21,113



10,725



10,388



97
%Restructuring costs and other charges


414



804



(390
)


(49
)%Total operating expenses

$
70,484


$
50,760


$
19,724



39
%   Sales and Marketing.
  Research and Development.
  General and Administrative.
  Restructuring charges.
  Contribution
    Margin
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Contribution Margin  application

$
40,345


$
30,190


$
10,155



34
%Contribution Margin  consulting


5,121



4,056



1,065



26
%Contribution Margin  total

$
45,466


$
34,246


$
11,220



33
%    43




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##### Table of Contents



Interest
    income and interest expense
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Interest income

$
2,891


$
873


$
2,018



231
%Interest expense


(107
)


(1,273
)


1,166



(92
)%Fees for early extinguishment of debt






(2,264
)


2,264




*Total other income (expense), net

$
2,784


$
(2,664
)

$
5,448



205
%   Interest Income.
  Interest Expense.
  Provision
    (Benefit) for Income Taxes
  Year EndedDecember 31,2006


2005


$ Change


% Change(In thousands)Provision (benefit) for income taxes

$
(131
)

$
4


$
(135
)


3,375
%   non-U.S. operations,
  Liquidity
    and Capital Resources
    Year Ended December 31,2007


2006


$ Change


% Change(In thousands)Cash provided by operating activities

$
30,141


$
9,262


$
20,879



225
%Cash used in investing activities


(13,789
)


(12,059
)


(1,730
)


14
%Cash provided by financing activities


10,100



2,388



7,712



323
%   Year Ended December 31,2006


2005


$ Change


% Change(In thousands)Cash provided by (used in) by operating activities

$
9,262


$
(875
)

$
10,137



1,159
%Cash used in investing activities


(12,059
)


(8,457
)


(3,602
)


43
%Cash provided by financing activities


2,388



63,041



(60,653
)


(96
)%  44




---



##### Table of Contents



Net
    Cash Provided by (Used in) Operating Activities
              Net
    Cash Used in Investing Activities
      Net
    Cash Provided by Financing Activities
     45




---



##### Table of Contents



9090-5415 9090-5415
          Contractual
    Obligations
   46




---



##### Table of Contents



Contractual
    obligations (in thousands)
  Less ThanTotal


1 Year


1-2 Years


3-5 YearsCapital lease obligations

$
54


$
38


$
16


$
Interest payments


2



2







Facility leases(1)


6,760



2,285



2,084



2,391Operating equipment leases


1,345



1,180



151



14Third party hosting facilities


1,230



1,100



130



Software contracts


5,231



3,819



1,412



Total contractual cash obligations

$
14,622


$
8,424


$
3,793


$
2,405     (1)
    
    Includes amounts associated with former headquarters facilities
    lease as described in Item 2  Properties.  Legal expenditures could also affect our
    liquidity.
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Foreign
    Currency Exchange Risk
    Interest
    Rate Sensitivity
   47




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            Accounting for Uncertainty in Income Taxes 
    an interpretation of FASB No. 109 Share Based
    Payment,
  Internal Control  Integrated Framework
      48




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control  Integrated Framework
        Internal Control  Integrated Framework
  Accounting for Uncertainty in
    Income Taxes  an interpretation of FASB
    No. 109 Share Based Payment,
   
  49




---



##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Rules 13a-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of Taleo;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of Taleo are being made only in
    accordance with authorizations of management and directors of
    Taleo; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of
    Taleos assets that could have a material effect on the
    financial statements.          Michael
    Gregoire
    President and Chief Executive Officer

Katy
    Murray
    Chief Financial OfficerMarch 13, 2008

March 13, 2008  50




---



##### Table of Contents



TALEO
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
86,135


$
58,785Restricted cash


288



2,722Accounts receivable, less allowance for doubtful accounts of
    $369 and $585 at December 31, 2007 and 2006, respectively


30,255



25,952Prepaid expenses and other current assets


5,912



3,657Investment credit receivable


4,734



4,395Total current assets


127,324



95,511Property and equipment, net


23,178



12,928Restricted cash


838



1,048Other assets


2,147



1,448Goodwill


9,785



6,028Other intangibles, net


1,404



457Total assets

$
164,676


$
117,420LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities

$
20,623


$
18,708Customer deposits


4



80Deferred revenue


36,748



18,547Capital lease obligation, short-term


38



381Total current liabilities


57,413



37,716Non-current liabilities:Customer deposits and long-term deferred revenue


273



360Other liabilities


4,535



1,101Capital lease obligation, long-term


16



17Commitments and contingencies (Note 12)Class B redeemable common stock, $0.00001 par value,
    4,038,287 shares authorized; 655,652 and
    1,873,811 shares outstanding at December 31, 2007 and
    December 31, 2006, respectively






Total liabilities


62,237



39,194Exchangeable share obligation


331



796Stockholders equity:Class A common stock; par value, $0.00001 per share;
    150,000,000 shares authorized; 25,442,373 and
    22,253,127 shares outstanding at December 31, 2007 and
    December 31, 2006, respectively






Additional paid-in capital


151,593



133,610Accumulated deficit


(51,387
)


(56,329
)Treasury stock, at cost, 6,900 and 14,413 shares
    outstanding at December 31, 2007 and December 31,
    2006, respectively


(195
)


(158
)Accumulated other comprehensive income


2,097



307Total stockholders equity


102,108



77,430Total liabilities and stockholders equity

$
164,676


$
117,420    51




---



##### Table of Contents



TALEO
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2007


2006


2005(In thousands, except per share data)Revenue:Application

$
105,092


$
79,137


$
63,296Consulting


22,849



17,906



15,114Total revenue


127,941



97,043



78,410Cost of revenue:Application


22,602



19,317



16,419Consulting


18,026



12,785



11,058Total cost of revenue


40,628



32,102



27,477Gross profit


87,313



64,941



50,933Operating expenses:Sales and marketing


36,916



29,482



22,544Research and development


22,981



19,475



16,687General and administrative


23,734



21,113



10,725Restructuring costs and other charges






414



804Total operating expenses


83,631



70,484



50,760Operating income (loss)


3,682



(5,543
)


173Other income (expense):Interest income


3,045



2,891



873Interest expense


(137
)


(107
)


(1,273
)Fees for early extinguishment of debt










(2,264
)Total other income (expense), net


2,908



2,784



(2,664
)Net income (loss) before provision for income taxes


6,590



(2,759
)


(2,491
)Provision (benefit) for income taxes


2,707



(131
)


4Net income (loss)


3,883



(2,628
)


(2,495
)Accretion of dividends and issuance costs on preferred stock










(2,984
)Net income (loss) attributable to Class A common
    stockholders

$
3,883


$
(2,628
)

$
(5,479
)Net income (loss) attributable to Class A common
    stockholders per share  basic

$
0.16


$
(0.13
)

$
(1.19
)Net income (loss) attributable to Class A common
    stockholders per share  diluted

$
0.13


$
(0.13
)

$
(1.19
)Weighted-average shares of Class A Common stock:Basic


24,116



20,031



4,619Diluted


28,777



20,031



4,619    52




---



##### Table of Contents



TALEO
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 AND
    COMPREHENSIVE INCOME (LOSS)
 Years Ended December 31, 2007, 2006, and 2005
  AccumComprehensive


TotalCommon Stock


Additional











Other


Stockholders


ComprehensivePar


Paid-In-


Treasury


Deferred


Accumm


Income


Equity


IncomeShares


Value


Capital


Stock


Comp


Deficit


(Loss)


(Deficit)


(Loss)(In thousands, except share data)Balances, January 1, 2005


67,415






$
5,039


$



$
(37
)

$
(48,222
)

$
224


$
(42,996
)Employee stock options exercised


148,351







490



















490Warrants exercised


2,584







8



















8Conversion of preferred shares into common shares at initial
    public offering


12,335,597







41,399



















41,399Issuance of common shares in lieu of cash payment of accreted
    dividends on preferred shares at initial public offering


841,124







11,776



















11,776Initial public offering (net of costs)


5,360,000







65,881



















65,881Stock based compensation










372



















372Forfeiture of Series D Preferred Stock options and
    contingent shares issuable as acquisition consideration










(18
)






3











(15
)Amortization of deferred compensation


















13











13Accrued dividend on Series C and Series D Preferred
    Stock






















(2,412
)






(2,412
)Accrual of issuance costs of Series C Preferred Stock






















(572
)






(572
)Net loss






















(2,495
)






(2,495
)

$
(2,495
)Foreign currency translation adjustments


























249



249



249Balances, December 31, 2005


18,755,071







124,947







(21
)


(53,701
)


473



71,698


$
(2,246
)Employee stock options exercised


917,918







2,355



















2,355Issuance of ESPP shares


64,513







616



















616Warrants exercised


53,801







1



















1Shares issued to former stockholders of White Amber


30,753







162



















162Class B Common stock exchanged for Class A Common Stock


2,164,476







961



















961Shares acquired from payroll tax payments


(14,413
)










(158
)














(158
)Restricted shares reacquired or forfeited


(9,063
)


























Issuance of Restricted shares


290,071







82



















82Reversal of deferred compensation due to adoption of
    SFAS 123(R)










(21
)






21











IPO related cost










3



















3Stock based compensation










4,504



















4,504Net loss






















(2,628
)






(2,628
)

$
(2,628
)Foreign currency translation adjustments


























(166
)


(166
)


(166
)Balances, December 31, 2006


22,253,127







133,610



(158
)






(56,329
)


307



77,430


$
(2,794
)Cumulative transition adjustment related to the adoption of
    FIN 48






















1,059







1,059Employee stock options exercised


1,438,610







9,439



















9,439Issuance of ESPP shares


143,992







1,018



608















1,626Warrants exercised


356,200



























Class B Common stock exchanged for Class A Common Stock


1,218,159







548



















548Shares acquired from payroll tax payments


(34,678
)










(645
)














(645
)Restricted shares reacquired or forfeited


(16,193
)


























Issuance of restricted shares


83,156







248



















248Stock based compensation










6,730



















6,730Net income






















3,883







3,883


$
3,883Foreign currency translation adjustments


























1,790



1,790



1,790Balances, December 31, 2007


25,442,373






$
151,593


$
(195
)

$



$
(51,387
)

$
2,097


$
102,108


$
5,673    53




---



##### Table of Contents



TALEO
    CORPORATION
    CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activities:Net income (loss)

$
3,883


$
(2,628
)

$
(2,495
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Depreciation and amortization


6,934



4,789



4,853Loss on disposal of fixed assets


13



390



190Tenant inducement from landlord






1,063



(97
)Amortization of tenant inducements


(223
)


(266
)


Stock-based compensation expense


6,730



4,504



385Director fees settled with stock


248



82



Bad debt expense (reversal)


(69
)


254



225Amortization and write-off of deferred financing fees










822Changes in working capital accounts:Interest earned on restricted cash


1



2



43Accounts receivable


(3,685
)


(11,134
)


(211
)Prepaid expenses and other assets


(1,500
)


(1,793
)


(1,480
)Investment credit receivable


446



563



(2,147
)Accounts payable and accrued liabilities


37



5,808



1,642Deferred revenues and customer deposits


17,326



7,628



(2,605
)Net cash provided by (used in) operating activities


30,141



9,262



(875
)Cash flows from investing activities:Acquisition of property and equipment


(13,152
)


(10,335
)


(3,222
)Restricted cash  decrease (increase)


2,664



(1,724
)


(1,382
)Acquisition of business, net of cash acquired


(3,301
)






(3,853
)Net cash used in investing activities


(13,789
)


(12,059
)


(8,457
)Cash flows from financing activities:Proceeds from long-term debt










20,230Principal payments of long-term debt










(24,298
)Principal payments on capital lease obligations


(357
)


(583
)


(535
)Debt issuance costs










(822
)Proceeds from stock options, ESPP Shares and warrants exercised


10,457



2,971



498Proceeds from initial public offering of common stock, net of
    offering costs










68,191Dividends paid on preferred stock (Note 8 
    Preferred Stock)










(223
)Net cash provided by financing activities


10,100



2,388



63,041Effect of exchange rate changes on cash and cash equivalents


898



(152
)


(136
)Increase (decrease) in cash and cash equivalents


27,350



(561
)


53,573Cash and cash equivalents:Beginning of year


58,785



59,346



5,773End of year

$
86,135


$
58,785


$
59,346Supplemental cash flow disclosures:Cash paid for interest

$
9


$
41


$
1,027Cash paid for loan prepayment penalties

$



$



$
1,570Cash paid for income taxes

$
305


$



$
Supplemental disclosure of non-cash financing and investing
    activities:Property and equipment acquired under capital lease

$
44


$



$
27Property and equipment purchases included in accounts payable
    and accrued liabilities

$
3,492


$
586


$
836Accrual of dividends on Series C and Series D
    Preferred Stock

$



$



$
2,189Amortization of issuance costs on Series C Preferred Stock

$



$



$
572Conversion of preferred shares into common shares at initial
    public offering

$



$



$
41,399Issuance of common shares in lieu of cash payment of accrued
    dividends on preferred shares at initial public offering

$



$



$
11,776Offering costs included in accounts payable

$



$



$
308Contingent shares issuable

$



$
(81
)

$
81Contingent shares issued

$



$
162


$
Class B common stock exchanged for Class A common stock

$
548


$
961


$
Treasury stock issued to employees under ESPP

$
608


$



$
Treasury stock acquired to settle employee withholding liability

$
645


$
158


$
    54




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Nature of
    Business and Basis of Presentation  Nature of Business
    Basis of Presentation
  Stock Split
  Allocation of Overhead Costs
  Recent
    Accounting Pronouncements 
  Fair Value Measurements
  The Fair Value
    Option for Financial Assets & Financial
    Liabilities  Including and Amendment of
    SFAS No. 115
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
 55




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2.
    Summary
    of Significant Accounting Policies  Use of Estimates
  Revenue Recognition
  No. 00-3, Application of AICPA Statement of Position
    97-2 to
    Arrangements That Include the Right to Use Software Stored on
    Another Entitys Hardware.
  Application
    Revenue
    
    persuasive evidence of an agreement exists;
    delivery has occurred;
    fees are fixed or determinable; and
    the collection of fees is considered probable.  No. 00-21, Revenue Arrangements with Multiple Deliverables and/or
    
    fees paid for subscription services
    amortization of any related
    set-up fees
    amortization of fees paid for hosting services and software
    maintenance services under certain software license
    arrangements; and
    amortization of related consulting fees in certain multiple
    element subscription arrangements where VSOE does not exist for
    an undelivered element   56




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Consulting
    Revenue
  time-and-materials
    Deferred Revenue and Customer Deposits
  Commission Expense
  Goodwill and Other Intangible Assets Goodwill and
    Other Intangible Assets,
  Impairment of Long-Lived Assets for the Impairment
    or Disposal of
    Long-Lived
    Assets,
  Income Taxes
 57




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109. Accounting for Income Taxes
    Taleo Contingent Accounts Receivable and Staffing Suppliers
    Payable
  Allowance for Doubtful Accounts
 58




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006


2005(In thousands)Balance at January 1

$
585


$
350


$
150Provision charged to expense


512



254



225Reversal of allowance provision


(581
)






Write-offs charged against allowance


(147
)


(19
)


(25
)Balance at December 31

$
369


$
585


$
350   Cash and Cash Equivalents
  Restricted Cash
  Concentration of Credit and Market Risk
  Fair Value of Financial Instruments
  Foreign Currency Translation
  Property and Equipment
 59




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Computer hardware and software

3 to 5 yearsFurniture and equipment

5 yearsLeasehold improvements

Shorter of lease term or useful life of asset   Investment Credits
  Advertising Expense
  Product and Software Development Costs Accounting for the
    Costs of Computer Software to be Sold, Leased or Otherwise
    Marketed 98-1, Accounting for the Cost of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1), SOP 98-1
  Stock-Based Compensation Accounting for Stock Issued to
    Employees Accounting for Stock-Based Compensation.
  Share-Based Payment,
 60




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comprehensive Income (Loss)
  3.
    Business
    Combinations  Acquisition
    of Wetfeet, Inc.
      Amounts


Assigned Life(In thousands)Goodwill

$
1,727Customer relationship


192



4 yearsLess: Net liabilities


(177
)Total preliminary purchase price allocation

$
1,742  61




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Acquisition
    of JobFlash, Inc.
      Amounts


Assigned Life(In thousands)Goodwill

$
2,030Existing technology


810



5 yearsCustomer relationship


290



4 yearsTradename


20



2 yearsNet assets


168Total preliminary purchase price allocation

$
3,318  62




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006Consolidated Proforma(In thousands, except per share data)Revenue

$
128,281


$
98,508Net income/(loss)

$
3,663


$
(5,267
)Net income/(loss) attributable to Class A common
    stockholders per share  basic

$
0.15


$
(0.26
)Net income/(loss) attributable to Class A common
    stockholders per share  diluted

$
0. 13


$
(0.26
)Weighted average Class A common shares  basic


24,116



20,031Weighted average Class A common shares  diluted


28,777



20,031   Acquisition
    of Recruitforce.com, Inc.
      Description

Amount


Assigned Life(In thousands)Goodwill

$
3,051Existing technology


623



5 yearsCustomer relationships


93



5 years3,767Cash acquired


51Other assets


222Liabilities assumed


(136
)Total purchase price

$
3,904    63




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      4.
    Intangible
    Assets and Goodwill      2007


2006Weighted-Average


Gross





GrossPeriod of


Carrying


Accumulated


Carrying


AccumulatedAmortization


Amount


Amortization


Amount


Amortization(In thousands)


(In thousands)Identifiable intangible assets:Existing technology


3.9 years


$
3,121


$
(2,170
)

$
2,311


$
(1,914
)Customer relationships


3.4 years



1,470



(1,017
)


967



(907
)Subtotal






4,591



(3,187
)


3,278



(2,821
)Goodwill






9,785







6,028



Total





$
14,376


$
(3,187
)

$
9,306


$
(2,821
)      64




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Estimated Amortization Expense

Amount(In thousands)2008

$
4362009


4282010


3102011


2002012


30Total

$
1,404   5.
    Property
    and Equipment    2007


2006(In thousands)Computer hardware and software

$
38,206


$
20,106Furniture and equipment


2,681



2,462Leasehold improvements


3,148



2,66144,035



25,229Less accumulated depreciation and amortization


(20,857
)


(12,301
)Total

$
23,178


$
12,928     6.
    Other
    Assets    2007


2006(In thousands)Deferred tax asset net of valuation allowance

$
1,773


$
1,284Other


374



164Total

$
2,147


$
1,448  65




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Accounts
    Payable and Accrued Liabilities    2007


2006(In thousands)Accrued compensation

$
8,706


$
7,092Accounts payable


2,170



2,388Accrued professional fees


1,650



1,452Accrued liability  Taleo Contingent customer payments






1,740Accrued income taxes


468



1,153Accrued liabilities and other


7,629



4,883Total

$
20,623


$
18,708   8.
    Preferred
    Stock    Preferred
    Stock Warrants
    9.
    Common
    Stock    Class A
    Common Stock
    Class B
    Common Stock and Exchangeable Shares
  9090-5415
 66




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9090-5415 9090-5415
        9090-5415
  Class A
    Common Stock Warrants
   67




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              Class A
    Common Stock Option Plans
   68




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted-AverageNumber of


Exercise PriceOptions


per ShareOutstanding  January 1, 2005


3,024,940


$
5.95Granted


1,634,942



13.58Exercised


(148,351
)


3.30Forfeited


(297,905
)


9.09Outstanding  December 31, 2005


4,213,626



8.78Granted


1,162,425



11.94Exercised


(857,203
)


2.69Forfeited


(362,734
)


13.55Outstanding  December 31, 2006


4,156,114



10.52Granted


969,457



17.62Exercised


(1,349,344
)


6.94Forfeited


(252,813
)


13.71Outstanding  December 31, 2007


3,523,414


$
13.61      69




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 96-18
    Weighted-AverageRemaining


Number ofNumber of Options


Contractual Life


OptionsRange of Exercise Prices

Outstanding


(Years)


Exercisable3.00 - 9.94


356,195



4.18



337,87910.12 - 11.80


354,070



8.66



149,14311.90 - 13.30


349,228



8.43



117,50113.50 - 13.50


803,494



7.20



525,19013.58 - 14.00


549,692



7.95



264,35214.10 - 15.79


363,311



9.08



11,70515.92 - 17.91


390,880



9.34



27018.00 - 23.12


323,794



7.54



191,75626.00 - 26.00


22,250



9.87



26.76 - 26.76


10,500



9.77



3,523,414



7.77



1,597,796Average exercise price per share









$
11.81     White
    Amber Stock Option Plan
   70




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-AverageNumber of


Exercise PriceOptions


per ShareOutstanding  January 1, 2005


183,411


$
0.78Exercised


(1,191
)


0.78Forfeited


(1,569
)


0.78Outstanding  December 31, 2005


180,651



0.78Exercised


(60,715
)


0.78Forfeited


(6,125
)


0.78Outstanding  December 31, 2006


113,811



0.78Exercised


(89,266
)


0.78Forfeited






Outstanding  December 31, 2007


24,545


$
0.78           Employee
    Stock Purchase Plan
   71




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Impact
    of the Adoption of SFAS No. 123(R)
    2007


2006(In thousands)Cost of revenues

$
795


$
414Sales and marketing


1,748



1,048Research and development


1,162



694General and administrative


3,025



2,348$
6,730


$
4,504         Determining
    Fair Value
   72




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007

2006

2005Stock Options:Expected volatility

49 to 51%

48 to 55%

70.5 to 79%Risk-free interest rate

3.9 to 5.1%

4.5 to 5.1%

3.1 to 4.1%Expected life (in years)

5.5 to 6.25

5.0 to 6.25

4.0Weighted-average exercise price per share of options granted

$17.62

$11.94

$13.58Weighted-average fair value per share of option granted

$9.49

$6.83

$7.81Forfeiture rate

23.8 to 24.2%

12.3 to 24.2%

Expected dividend yield

0%

0%

0%   2007

2006Employee Stock Purchase Plan:Expected volatility

44 to 53%

53 to 55%Risk-free interest rate

3.49 to 5.09%

5.09 to 5.24%Expected life (in weeks)

26.0

24.0 to 26.0Expected dividend yield

0%

0%       2005(In thousands)Net loss attributable to Class A common
    stockholders As reported

$
(5,479
)Add: Stock-based compensation expense included in reported net
    loss


13Less: Stock-based compensation expense determined under fair
    value based method for all awards, net of related tax effects


(2,683
)Pro-forma net loss

$
(8,149
)Net loss attributable to Class A common shareholders per
    share Basic and diluted as reported

$
(1.19
)Pro forma

$
(1.76
)   Restricted
    Stock and Performance Shares
   73




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-AveragePerformance


Restricted


Grant-Share


Stock


Date Fair ValueAwards


Awards


per ShareRepurchasable/nonvested balance  January 1, 2006










Awarded


66,179



282,017


$
11.48Released/vested


(8,054
)


(38,579
)


9.74Forfeited/cancelled


(4,375
)


(9,063
)


11.90Repurchasable/nonvested balance  December 31,
    2006


53,750



234,375



11.75Awarded


2,481



58,800



17.00Released/vested


(24,356
)


(76,606
)


10.56Forfeited/cancelled


(3,750
)


(16,193
)


11.48Repurchasable/nonvested balance  December 31,
    2007


28,125



200,376



13.77     Reserved
    Shares of Common Stock
    Exchange of exchangeable shares and redemption of Class B
    common stock


655,652Class A Common Stock Plans (excluding the White Amber Stock
    Plan and Employee Stock Purchase Plan)


3,753,782White Amber Stock Plan


24,545Employee Stock Purchase Plan


291,495Total


4,725,474  74




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10.
    Related-Party
    Transactions      11.
    Income
    Taxes    Year Ended December 31,2007


2006


2005(In thousands)Domestic

$
5,441


$
(5,786
)

$
(5,120
)Foreign


1,149



3,027



2,629Total

$
6,590


$
(2,759
)

$
(2,491
)     Year Ended December 31,2007


2006


2005(In thousands)CurrentFederal

$
227


$



$
Foreign


1,762



1,153



4Total

$
1,989


$
1,153


$
4DeferredForeign


718



(1,284
)


Total provision (benefit) for income taxes

$
2,707


$
(131
)

$
4   75




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2007


2006


2005Federal tax at statutory rate


34
%


(34
)%


(34
)%State income taxes, net


7



(12
)


(8
)U.S. Alternative Minimum Taxes


3







Impact of foreign audits


44



44



(3
)Non-deductible share based payments


13



31



Canadian Investment Tax Credits


(15
)






Non-deductible other expenses


7



21



11Change in valuation allowance


(52
)


(55
)


34Total


41
%


(5
)%



%     2007


2006(In thousands)Deferred tax assets:Tax loss carry forwards

$
7,682


$
14,074Reserves and accruals


2,823



1,041Property and equipment


82



1,040Warrants issued for services






1,321Deferred revenue


24



36Alternative Minimum Tax credit


262



35Canadian investment credits


563



Stock based compensation


1,933



834Other, net


144



146Total deferred tax assets

$
13,513


$
18,527Deferred tax liabilities:Canadian investment credits

$



$
(1,426
)Acquired intangible assets


(128
)


(181
)Total deferred tax liabilities

$
(128
)

$
(1,607
)Net deferred tax asset

$
13,385


$
16,920Valuation allowance


(11,612
)


(15,636
)Deferred tax asset, net

$
1,773


$
1,284    76




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  non-U.S. income
      Uncertain Tax Benefits(In millions)Uncertain tax benefits at January 1, 2007

$
1.3Increases for uncertain tax benefits of prior years


2.3Decreases for uncertain tax benefits of prior years


(0.6
)Settlements


(0.1
)Lapse of statute of limitations


Uncertain tax benefits at December 31, 2007

$
2.9            77




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    12.
    Commitments
    and Contingencies  Leases
    Operating LeasesThirdParty


TotalEquipment


Facility


Hosting


Operating


Software


CapitalLeases


Leases


Facilities


Leases


Contracts


Leases


Total(In thousands)


(In thousands)


(In thousands)2008

$
1,180


$
2,285


$
1,100



4,565


$
3,819


$
40


$
8,4242009


115



1,145



130



1,390



1,412



11



2,8132010


36



939







975







5



9802011


14



960







974











9742012






980







980











9802013






451







451











451Total

$
1,345


$
6,760


$
1,230


$
9,335


$
5,231


$
56


$
14,622Less amounts representing interest






















(2
)Present value of minimum lease payments






















54Less current portion






















(38
)Noncurrent portion





















$
16     Litigation
  and/or
   78




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Indemnification
      13.
    Employee
    Benefit Plans   79




---



##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Net
    Income/(Loss) Per Share  Earnings Per Share No. 03-6, Participating Securities and the Two Class Method
    under FASB Statement No. 128,
      2007


2006


2005Class A


Class B


Class A


Class B


Class A


Class BCommon


Common(1)


Common


Common(1)


Common


Common(1)(In thousands, except per share data)Allocation of net income/(loss)

$
3,883






$
(2,628
)





$
(5,479
)


Weighted-average shares outstanding  basic


24,116



1,108



20,031



3,140



4,619



4,038Weighted-average shares outstanding  diluted


28,777



1,874



20,031



3,140



4,619



4,038Net income/(loss) per share  basic

$
0.16






$
(0.13
)





$
(1.19
)


Net income/(loss) per share  diluted

$
0.13






$
(0.13
)





$
(1.19
)


     (1)
    
    Class B common shares are non-participating in periods of
    net income or net losses and as a result have no attribution of
    earnings or losses for the purposes of calculating earnings per
    share. The corresponding exchangeable shares, discussed at
    Note 9.  Common Stock, are participating
    securities but have no legal requirement to fund such losses,
    making them antidilutive for all periods presented, except 2007.  15.
    Segment
    and Geographic Information, International Operations, and
    Customer Concentrations  Disclosures About Segments of an Enterprise and Related
    Information,
 80




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Application


Consulting


Total(In thousands)2005:Revenue

$
63,296


$
15,114


$
78,410Contribution margin(1)


30,190



4,056



34,2462006:Revenue


79,137



17,906



97,043Contribution margin(1)


40,345



5,121



45,4662007:Revenue


105,092



22,849



127,941Contribution margin(1)


59,509



4,823



64,332     (1)
    
    The contribution margins reported reflect only the expenses of
    the line of business and do not represent the actual margins for
    each operating segment since they do not contain an allocation
    for selling and marketing, general and administrative, and other
    corporate expenses incurred in support of the line of business.  Profit
    Reconciliation
  Year Ended December 31,2007


2006


2005(In thousands)Contribution margin for reportable segments

$
64,332


$
45,466


$
34,246Sales and marketing


(36,916
)


(29,482
)


(22,544
)General and administrative


(23,734
)


(21,113
)


(10,725
)Restructuring charges






(414
)


(804
)Interest and other income, expense, net


2,908



2,784



(2,664
)Net income (loss) before provision for income taxes

$
6,590


$
(2,759
)

$
(2,491
)      81




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    United States


Canada


Europe


Other


Total(In thousands)Year ended December 31, 2005 Revenues

$
69,077


$
5,542


$
2,610


$
1,182


$
78,410Assets

$
85,025


$
12,402


$
1,105


$
488


$
99,020Year ended December 31, 2006  Revenues

$
88,404


$
5,716


$
1,939


$
984


$
97,043Assets

$
102,114


$
12,383


$
1,703


$
1,220


$
117,420Year ended December 31, 2007 Revenues

$
119,293


$
7,024


$
922


$
702


$
127,941Assets

$
145,535


$
16,212


$
2,371


$
558


$
164,676       16.
    Severance
    and Exit Costs  Accounting for Costs Associated with
    Exit or Disposal Activities.
  Summary
  LiabilityBalanceLiability for the Remaining Net Lease Payments

Liability Balance





December 31,for the San Francisco Facility

January 1, 2007


Cash Payments


2007(In thousands)Lease payments

$
979


$
(370
)

$
609Sublease rental income


(691
)


248



(443
)Net liability

$
288


$
(122
)

$
166   82




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Costs Associated with the Exit from the San Francisco
    Facility

Amount(In thousands)Establishment of initial net liability for net lease payments at
    July 2006

$
469Reversal of accrued rent from original lease


(237
)Adjustment for tenant inducements from original lease


(102
)Write-off of fixed assets


217Commissions and legal costs


79Total exit expense

$
426   Relocation
    of Accounting and Finance Department
      Transition
    of Time and Expense Services Processing
   83




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##### Table of Contents



TALEO
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    Selected
    Quarterly Financial Data (Unaudited)    1st Quarter


2nd Quarter


3rd Quarter


4th Quarter


Fiscal Year(In thousands, except per share data)2007Revenue

$
28,717


$
30,954


$
33,744


$
34,526


$
127,941Gross profit


19,828



20,944



23,433



23,108



87,313Operating income


514



499



1,597



1,072



3,682Net income (loss)


908



(1,753
)


2,233



2,495



3,883Net income (loss) attributable to Class A common
    stockholders per share  basic

$
0.04


$
(0.07
)

$
0.09


$
0.10


$
0.16Net income (loss) attributable to Class A common
    stockholders per share  diluted

$
0.03


$
(0.07
)

$
0.08


$
0.08


$
0.13Weighted average Class A common shares outstanding
     basic


22,804



23,908



24,638



25,084



24,116Weighted average Class A common shares outstanding
     diluted


26,014



23,908



28,771



29,541



28,7772006Revenue

$
22,164


$
23,472


$
24,883


$
26,524


$
97,043Gross profit


14,357



15,439



16,795



18,350



64,941Operating loss


(1,265
)


(2,585
)


(1,658
)


(35
)


(5,543
)Net income (loss)


(594
)


(1,828
)


(757
)


551



(2,628
)Net income (loss) attributable to Class A common
    stockholders per share  basic

$
(0.03
)

$
(0.10
)

$
(0.04
)

$
0.03


$
(0.13
)Net loss attributable to Class A common stockholders per
    share  diluted

$
(0.03
)

$
(0.10
)

$
(0.04
)

$
0.02


$
(0.13
)Weighted average Class A common shares outstanding
     basic


18,789



19,229



20,384



21,667



20,031Weighted average Class A common shares outstanding
     basic


18,789



19,229



20,384



25,848



20,031  84




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of disclosure controls and procedures
  Form 10-K.
  Managements
    annual report on internal control over financial
    reporting
    Changes
    in internal control over financial reporting
      ITEM 9B.
    OTHER
    INFORMATION  Director
    Retirement
   85




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##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES    Financial Statements.
  Financial Statement Schedules.
    Exhibits. Form 10-K.
 86




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##### Table of Contents



SIGNATURES    TALEO CORPORATION
  By:
    /s/  Katy
    Murray        POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Michael
    GregoireMichael
    Gregoire

President, Chief Executive Officer and Director
    (Principal Executive Officer)

March 13, 2008/s/  Katy
    MurrayKaty
    Murray

Chief Financial Officer
    (Principal Accounting and Financial Officer)

March 13, 2008/s/  Eric
    HerrEric
    Herr

Chairman of the Board of Directors

March 13, 2008/s/  Gary
    BloomGary
    Bloom

Director

March 13, 2008/s/  Patrick
    GrossPatrick
    Gross

Director

March 13, 2008/s/  Howard
    GwinHoward
    Gwin

Director

March 13, 2008/s/  Greg
    SantoraGreg
    Santora

Director

March 13, 2008 87




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##### Table of Contents



Signature

Title

Date/s/  Jeffrey
    SchwartzJeffrey
    Schwartz

Director

March 13, 2008/s/  Michael
    TierneyMichael
    Tierney

Director

March 13, 2008  88




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description2
.1

Asset Purchase Agreement dated as of March 2, 2007, by and
    among the Registrant, JobFlash, Inc., and, with respect to
    Article X, Article XI and Article XII thereof
    only, U.S. Bank National Association as Escrow Agent
    (incorporated herein by reference to Exhibit 2.1 to the
    Registrants Current Report on
    Form 8-K,
    filed on March 8, 2007)3
.1

Amended and Restated Certificate of Incorporation
    (incorporated herein by reference to Exhibit 3.1 to the
    Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on September 13, 2005)3
.2

Bylaws (incorporated herein by reference to Exhibit 3.2
    to the Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on May 13, 2004)4
.1

Form of Class A common stock certificate (incorporated
    herein by reference to Exhibit 4.1 to the Registrants
    Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on September 13, 2005)4
.2

Form of Class B common stock certificate (incorporated
    herein by reference to Exhibit 4.2 to the Registrants
    Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on September 13, 2005)4
.3

Second Amended and Restated Investor Rights Agreement, dated
    October 21, 2003 (incorporated herein by reference to
    Exhibit 4.3 to the Registrants Registration Statement
    on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on March 31, 2004)4
.4

Covenant Agreement, dated November 24, 1999, between the
    Registrant and ViaSite Inc. (incorporated herein by reference
    to Exhibit 4.4 to the Registrants Registration
    Statement on
    Form 10-12G,
    Commission File
    No. 000-51299,
    filed on May 2, 2005)10
.1*

1999 Stock Plan and form of agreement thereunder (incorporated
    herein by reference to Exhibit 10.1 to the
    Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on March 31, 2004)10
.2*

ViaSite Inc. Stock Plan (incorporated herein by reference to
    Exhibit 10.2 to the Registrants Registration
    Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on March 31, 2004)10
.3

2003 Series D Preferred Stock Plan and form of agreement
    thereunder (incorporated herein by reference to
    Exhibit 10.3 to the Registrants Registration
    Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on March 31, 2004)10
.4*

2004 Stock Plan and form of agreement thereunder
    (incorporated herein by reference to Exhibit 10.4 to the
    Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on January 28, 2005)10
.5*

Form of Taleo Corporation 2004 Stock Plan Restricted Stock
    Agreement (incorporated herein by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K,
    filed on June 6, 2006)10
.6*

Form of Taleo Corporation 2004 Stock Plan Performance Share
    Agreement (incorporated herein by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K,
    filed on June 6, 2006)10
.7*

2004 Employee Stock Purchase Plan (incorporated herein by
    reference to Exhibit 10.5 to the Registrants
    Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on January 28, 2005)10
.8*

2005 Stock Plan and form of agreement thereunder
    (incorporated herein by reference to Exhibit 10.24 to
    the Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on September 13, 2005)10
.9*

Employment Agreement, dated March 14, 2005, between the
    Registrant and Michael Gregoire (incorporated herein by
    reference to Exhibit 10.16 to the Registrants
    Registration Statement on
    Form 10-12G,
    Commission File
    No. 000-51299,
    filed on May 2, 2005)10
.10*

Employment Agreement between the Registrant and Katy Murray
    dated August 4, 2006 (incorporated herein by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K,
    filed on August 10, 2006)10
.11*

Consulting Agreement, dated November 9, 2007, between the
    Registrant and Bradford Benson (incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K,
    filed on November 14, 2007) 89




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##### Table of Contents



ExhibitNumber

Description10
.12*

Employment Agreement, dated March 8, 2006, between the
    Registrant and Jeffrey Carr (incorporated herein by reference
    to Exhibit 10.10 to the Registrants Annual Report on
    Form 10-K,
    filed on April 17, 2006)10
.13*

Employment Agreement, dated March 8, 2006, between Taleo
    (Canada) Inc. and Guy Gauvin (incorporated herein by
    reference to Exhibit 10.11 to the Registrants Annual
    Report on
    Form 10-K,
    filed on April 17, 2006)10
.14*

Cessation of Employment and Board Compensation Agreement, dated
    March 8, 2006, between the Company and Louis Tetu
    (incorporated herein by reference to Exhibit 10.12 to
    the Registrants Annual Report on
    Form 10-K,
    filed on April 17, 2006)10
.15*

Consulting Agreement, effective January 1, 2007, between
    Taleo Corporation and LT Management, Inc. (which is
    incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed on April 6, 2007)10
.16*

Summary of the 2007 Executive Incentive Bonus Plan
    (incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed on March 20, 2007)10
.17*

Summary of the 2008 Executive Incentive Bonus Plan
    (incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K,
    filed on February 7, 2008)10
.18*

Form of Indemnification Agreement entered into by the Registrant
    and each of its directors and executive officers
    (incorporated herein by reference to Exhibit 10.6 to the
    Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on March 31, 2004)10
.19

Agreement, dated September 1, 2002, between the Registrant
    and Internap Network Services Corporation (incorporated
    herein by reference to Exhibit 10.13 to the
    Registrants Registration Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on January 28, 2005)10
.20

Master Services Agreement dated April 14, 2006, by and
    between the Registrant and Equinix Operating Co., Inc.
    (incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K,
    filed on April 20, 2006)10
.21

Lease for 575 Market Street, Eighth Floor, San Francisco,
    California (incorporated herein by reference to
    Exhibit 10.9 to the Registrants Registration
    Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on September 13, 2005)10
.22

Sublease Agreement dated October 19, 2006 by and between
    the Registrant, as sublessor, and Cyworld, Inc., as sublessee,
    for the premises located at 575 Market Street,
    San Francisco, California (incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K,
    filed on October 25, 2006)10
.23

Lease for 330 St. Vallier East, Suite 400, Quebec, QC,
    Canada (incorporated herein by reference to
    Exhibit 10.10 to the Registrants Registration
    Statement on
    Form S-1,
    Commission File
    No. 333-114093,
    filed on May 13, 2004)10
.24

Lease for 4140 Dublin Blvd., Suite 400, Dublin, California
    (incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    filed on March 22, 2006)10
.25

Oracle License and Service Agreement, dated May 30, 2007,
    by and between Taleo Corporation and Oracle USA, Inc.
    (incorporated herein by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on
    Form 10-Q,
    filed on August 9, 2007)10
.26

Payment Schedule Agreement, dated May 30, 2007, by and
    between Taleo Corporation and Oracle Credit Corporation,
    (incorporated herein by reference to Exhibit 10.2 to the
    Registrants Quarterly Report on
    Form 10-Q
    filed on August 9, 2007)21
.1

List of Subsidiaries as of February 29, 200823
.1

Consent of Deloitte & Touche LLP, Independent
    Registered Public Accounting Firm24
.1

Power of Attorney (see the signature page of this Annual Report)31
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Indicates management compensatory plan, contract or arrangement.
    
    Confidential treatment has been requested for portions of this
    exhibit. 90