The best way to tackle Microsoft's (NASDAQ:MSFT) software empire isn't by land or by sea. It's by Internet, at least according to Google (NASDAQ:GOOG). The Internet giant teamed up with Sun Microsystems (NASDAQ:SUNW) to promote Sun's Web-based StarOffice suite of productivity software two years ago. Since then, Google has been rolling out its own collection of apps for online word processing, spreadsheets, and calendar scheduling.
Can it get better? You bet. This morning's Wall Street Journal reports that Google is in talks with Salesforce.com (NYSE:CRM) to form an alliance between the search engine leader and the fast-growing provider of Web-based customer-relationship management software.
No surprise here. The two struck up a deal to promote each other's online functionalities last year, when Salesforce launched a service to make sponsored ad campaigns more effective through Google's contextual marketing AdWords platform.
Ganging up to nibble on Microsoft's ankles may seem like a costly diversion. The companies have bigger rivals in their respective strongholds. Microsoft is a distant third in Google's search engine space. Salesforce butts heads with Microsoft in the enterprise software niche, but companies like Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP) are the ones that pose as standalone threats to Salesforce's on-demand apps business.
However, Microsoft becomes a bigger threat as it grows more Web-savvy, so it's better to be more proactive than reactive.
Investors bid shares of Salesforce up by as much as 9% this morning. A potential partnership wouldn't seem that valuable. The speculator's mindset has to be that if Google and Salesforce are talking about an alliance, then Google may just propose to swallow Salesforce whole.
That would be a risky assumption. Google may want to wait to complete its $3.1 billion acquisition of DoubleClick before pondering a deal that would easily cost twice as much to complete.
In short, they're just friends, people. But apparently, they're friends with benefits.
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Longtime Fool contributor Rick Munarriz is a huge fan of Google and it would be his home page if it weren't for Fool.com taking up that piece of real estate. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.
