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Salesforce.com gets a boost from Google alliance

"The enemy of the enemy is my friend. That makes Google my best friend."

Marc Benioff, Salesforce.com chairman

Salesforce.com Inc's stock price climbed by more than 4 percent on Monday in response to a report that the online software pioneer is poised to team up with Internet search leader Google Inc in a double-barreled attack on Microsoft Corp.

Although details are still being negotiated, the alliance would most likely involve blending Google mass-market applications like instant messaging, word processing and spreadsheets with Salesforce.com's business programs for managing customer relationships, the Wall Street Journal said.

Microsoft, the world's largest software maker, competes in all those fields, making it logical for Google and Salesforce.com to draw upon their respective strengths to thwart a common rival.

A partnership makes so much sense that "it's not out of the realm of possibility that Google ends up buying Salesforce.com," CIBC World Markets analyst Brad Reback said.

tantalizing prospect

Investors seemed tantalized by that prospect as Salesforce.com shares rose US$2.05, or 4.5 percent, to US$47.85 in Monday's late afternoon trading. Google shares gained US$0.70 to US$471.02.

Google is still trying to close its planned US$3.1 billion acquisition of online ad service DoubleClick Inc in what would be the largest deal in its nine-year-history. Buying Salesforce.com would cost even more, given the company's US$5.5 billion market value.

In a Monday interview, Salesforce.com chairman Marc Benioff reiterated his long-standing admiration of Google but declined to comment on any possible talks.

"The enemy of the enemy is my friend," he said. "That makes Google my best friend."

A Google spokesman declined to comment on Monday.

A formal announcement between the two companies is expected early next month.

Benioff, a firm advocate of distributing software applications over the Internet, has repeatedly depicted Microsoft as a lumbering dinosaur that he hopes to drive into extinction.

free alternatives

The topic surfaced during the quarterly earnings conference call of Salesforce.com last week when Benioff told analysts his company already has been promoting Google's free alternatives to Microsoft's widely used suite of office applications.

"We're accelerating Google against Microsoft because we show customers that they can use Google apps, like Google spreadsheet and Google word processor instead of buying Microsoft Office," Benioff said.

Google has been promoting its applications more aggressively this year as it tries to give Web surfers more reasons to visit its site, where it makes most of its money from online ads. The company also is trying to create a new source of revenue by licensing an expanded suite of applications to corporate customers.

To underscore its ambitions, Google earlier this month embraced "Search, Ads and Apps" as its new theme.

Meanwhile, Salesforce.com has overcome initial skepticism to prove companies are willing to lease some applications over the Internet instead of going through the more cumbersome -- and often more expensive -- process of installing the programs directly on computer hard drives.
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