No takeover for Salesforce.com from Google dalliance

No takeover, no merger, just a new ad channel and route to market for Google. The details of Salesforce.com and Google's much-leaked dalliance has been revealed.

Salesforce.com will roll out a new version of its service so its 32,300 customers can distribute their online ads through Google, which makes most of its money by steering marketing campaigns toward the most likely buyers.

Saleforce.com's upgraded service is set up to track any customer referrals generated by Google's ads. No ads will be shown within Salesforce.com's service, which makes money by selling monthly and annual subscriptions to its applications.

The first fruits of this alliance is an 'edition' of Salesforce.com called 'Salesforce Group Edition featuring Google Adwords'that enables its users to make use of keyword ads in Google. From within Salesforce, users can bid for keywords in Google and set a budget. Salesforce will automatically generate the HTML for a 'landing page' on a website, so that when a prospective customer arrives on the landing page, it asks them for their details and automatically generates a sales lead in salesforce.com.

The deal is aimed at stopping both Microsoft and Yahoo as they try to expand their own internet advertising networks. Salesforce.com should give Google access to more small- to medium-size businesses that haven't previously advertised in its network.

The alliance will undoubtedly have a 'holo effect' for Salesforce.com, but falls considerably short of the expectations in the market that were generated by the Wall Street Journal a few weeks ago. That suggested that Google might blend some of its own software applications like e-mail, instant messaging, spreadsheets and word processing with Salesforce.com's.

“When Google and salesforce.com let it be known that they were working on something jointly, there was a lot of speculation over what it might be," notes David Bradshaw of research firm Ovum. "There were even some rumours that Google might be buying Salesforce. That rumour was easy to dismiss, because the two companies would have gone to great lengths to keep negotiations of that kind completely secret. In the end, it became clear that it was going to be an alliance of some kind.

“Some may see this as an anti-climax, but clearly this is just a first step and there will be further steps. Google and Salesforce aren't saying what's next on their roadmap, though with a six-month development cycle, there clearly must be more coming. Instead, Salesforce is asking its customers to tell it what they would like to see via its Ideas Exchange. Meanwhile, for those who are keen to get on with developing their own stuff, Salesforce has given access to the Google Adwords APIs via its Apex programming environment.

“But as a first step in a long programme, this makes perfect sense. In an age when the web is becoming key to success in almost any market, making it easier for smaller companies to buy, use and monitor returns from Google Adwords is a very positive development. These types of companies will generally not have the technical or marketing skills to do it on their own."