Monday, May 21, 2007

Google, talk alliance (Mercury News)

By Ryan Blitstein

Google and are discussing a broad partnership that might help both companies in their ongoing battles with Microsoft, the Wall Street Journal has reported, citing "people familiar with the matter."
Both companies are the largest in their main business areas - online search and advertising for Google and online customer relationship management for Salesfoce - and have recently expanded into areas of business software now dominated by Redmond, Wash., software giant Microsoft.

Salesforce, based in San Francisco, offers online services that help businesses manage sales and client relationships. But through a program called AppExchange and alliances with other companies, its customers can run other business functions, such as marketing and finances, using Salesforce.

Mountain View-based Google pulls in the bulk of its revenue selling ads online through its search portal and on partner sites. During the past several months, though, the company has begun offering online word processing and spreadsheet services in the hopes of luring large business customers.

Together, the companies would be able to provide a wide range of online services, competing with much of Microsoft's business software portfolio, at a far lower price. These would include collaborative software such as instant messaging and e-mail, productivity software such as a PowerPoint-like presentation service, and business software to manage functions like human resources and data analysis.

Salesforce's first quarter revenue, announced last week, grew 55 percent to $162 million. Google earned $1 billion, 69 percent higher than the year before. But its sales to large corporations have thus far been a "non-event," according to Trip Chowdhry, managing director at Global Equities Research, based in Half Moon Bay.

Shares of stock rose $2.58 to $48.38, and shares of Google were up $0.38 to $470.70 as of 9:53 a.m. Microsoft's stock climbed $0.31 to $31.14.

Google and Salesforce both declined to comment.

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