Rumour Central - and Google set for Microsoft-bashing alliance?

Google and are discussing an alliance that could see the two bundle web-based applications, according to a report in The Wall Street Journal.

The Wall Street Journal - which is usually on the ball with technology stories - said that details of the potential partnership are yet to be decided but that an announcement is due in the coming weeks.

It's long been speculated that such an alliance was in the offing. Google Apps doesn't have a native CRM component, while the Salesforce suite lacks office productivity applications.

Google would gain access to's traction in the on demand business applications market, while would gain from the leverage that being associated with the leading Web 2.0 firm would bring. Google has the resources to develop CRM software in house but also has the cash to buy a reaedy-made CRM vendor.

Inevitably both parties are tight-lipped as of now, with CEO Marc Benioff admitting that he was being unusually reticent. "Everyone wants to know what's going on with us and Google," Benioff said. "However, in this case I'm sorry, but all we can say is we can't comment at this time on what's happening with us and Google."

But he couldn't resist a tantalising hint. "The enemy of the enemy is my friend," he said later. "That makes Google my best friend."

Analysts see a lot of sense in a partnership and even a possible merger. "It's not out of the realm of possibility that Google ends up buying," said CIBC World Markets analyst Brad Reback.

"We're talking about two of the biggest SaaS companies - and they have a common enemy in Microsoft," said AMR Research's Rob Bois. "From a political standpoint, it makes a lot of sense for those two companies to be aligned."

Benioff talked at greater length about his admiration for Google in an analyst conference call last week. "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," he said. "Microsoft doesn't like that."


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