Google Inc and Sun Microsystems Inc announced a broad but vague agreement Tuesday to develop and distribute each other's technology in a bid to expand their markets and challenge Microsoft Corp's dominance of computer desktops.
Under the agreement, Sun will include the Google toolbar as an option when consumers download the Java programming tool, a software program that is widely considered one of Sun's crown jewels. The deal is also expected to make it easier for customers to obtain OpenOffice, Sun's freely distributed office productivity suite that competes with Microsoft Office.
"This is a very strategic deal for Google," said Google's chief executive, Eric Schmidt, a longtime employee of Sun and a one-time confidant of Sun's chief executive, Scott McNealy.
The two executives appeared together at a news conference at the Computer History Museum in Mountain View, California, where they were joined by Vinton Cerf, a software engineer widely credited as an inventor of the Internet, who recently joined Google.
The agreement with Sun comes as Google is trying to expand beyond being the dominant supplier of Web search services. At the same time Sun, whose fortunes have been improving after several years of declining market share, will gain a visible role in the future of Google, which has quickly become the Internet industry's biggest success story.
Given that Google generates its revenue from the advertising on its toolbar, the deal could mean a substantial expansion of Google's market, Schmidt said. According to Sun's estimates, nearly 20 million users download the Java program every month.
The collaboration will significantly raise the profile of Sun's OpenOffice, a suite of software applications that offers many functions of Microsoft Office, including a word processor, spreadsheet and presentation program. But Schmidt gave no details on how Google might be involved in OpenOffice. "We're going to work to make the distribution of it more broad," he said.
The companies said they would offer additional details at a later date.
Executives declined to disclose the financial terms of the deal, saying only that they expect it will generate substantial revenue.
"There is going to be a lot of money flowing both ways if we do this thing right," McNealy said.
As part of his effort to stage a turnaround for Sun, McNealy also said he was trying to grab a bigger share of Wall Street's business, a market where Google is strong. But McNealy deflected questions that implied the collaboration was aimed at taking on Microsoft.
"We're going after revenue, growth, profits, customers," he said.
Analysts said that while the deal would probably bear fruit over the next few years, in the short term it amounted to little more than a limited distribution agreement.
"Clearly there's a lot Google and Sun can get from working together, but what you're looking at today is a toolbar promotion," said Brent Bracelin, an analyst with Pacific Crest Securities. "There's not a lot of substance."
Still, he said, the collaboration will probably lead to a closer integration of the two programs.
"A closer integration of Java and the toolbar could be pretty powerful for Google," Bracelin said. "But for now it's all future stuff."
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