Google and’s First Date Leaves Paparazzi Disappointed

Just like the frenzy and speculation that surrounds every high-profile couple before they tie the knot in today’s pop culture, the build up over the past few weeks around a pending announcement between Google and was destined to fall short of many people’s overblown expectations.

Much of the speculation centered on whether Google would acquire in an attempt to dramatically strengthen the search vendor’s foray into desktop and business applications. In March, I made my bet that Oracle would be the first suitor to try to capitalize on’s meteoric rise in the on-demand business apps world.

Although I can certainly see the logic in a Google/ marriage, I thought it was premature for the companies to do this kind of deal at this stage. Unless, Oracle initiated a hostile takeover attempt for, the on-demand vendor wasn’t incented to seek an acquisition elsewhere. And, Google had other acquisition priorities more closely related to its core business of online advertising to be in such a hurry to acquire’s on-demand business app platform and ecosystem.

So, anyone who was waiting for an announcement of a Google/ merger was bound to be disappointed when they simply unveiled a strategic alliance overnight. This new formal alliance is based on a more informal working relationship which the two companies have built around their open application program interfaces (APIs) and web services platforms which have enabling third-parties to create ‘mash-ups’ for a while.

In their joint announcement and in a prior briefing which they gave me last night, the two companies revealed they will kick off their new formal relationship with a narrowly focused enhancement of the for Google Adwords solution which enables companies to acquire and administer Google’s popular online advertising mechanism via’s customer relationship management (CRM) and salesforce automation (SFA) applications. This integration process began with’s acquisition of Kieden Corporation last August, a start-up built on’s AppExchange platform aimed at leveraging the’s apps to measure the effectiveness of Google Adword expenditures. The acquisition led to the rollout of for Google Adwords.

What makes the new offering different and more significant than the existing service is that this is the first time the two companies have officially sat down to develop and deliver fully integrated joint solutions. The initial offering targets very small organizations that have not used and/or Google Adwords in the past, and are looking for an easy, turnkey solution that makes the online advertising and sales management process simple and cost-effective.

While this might look like a non-event, it is actually a logical first step for two companies who share a common vision about how they would like to disrupt the traditional software business. It also demonstrates that they are not joining together just to steal headlines, but are sincerely interested in building a strong working relationship which produces tangible business benefits for their mutual customers. They are also looking for ways that they can each extend their market reach through this alliance. In this first offering, they have succeeded by making their existing solutions more accessible to a population of small companies who were previously reluctant to advertise via Google Adwords or adopt’s on-demand CRM and SFA applications.

I expect plenty of press and analyst furor in the coming days that the Google and announcement failed to meet the market’s unrealistic expectations.

However, I also expect the two companies to build on the success of their first joint offering and create a long-term relationship which may ultimately lead to the same place many had expected today, namely a merger of two very like-minded companies.

In the meantime, stay tuned for a steady stream of additional offerings which tighten the bond between the two companies, accelerates the adoption of on-demand solutions, and benefits not only Google and’s mutual customers, but also their respective ecosystems of strategic partners.

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