Google services to challenge Microsoft
Google today announced the launch of a suite of Web-based applications for small businesses, a step analysts say moves the company toward more direct competition with Microsoft.
Google Apps for Your Domain (google.com/a) bundles several of the tech giant's popular features--E-mail, group-scheduling calendars, voice calling and instant-messaging services, and Web design and hosting features--adding some administrative controls. The launch version is free, supported by advertising. Google plans to introduce a paid version of the service that will include more storage and some technical support. It most likely will be ad free by the end of the year; its price has not been set.
The potential benefits of the service are that employees can access the software from any computer via the Internet while employers can reduce costs. "A hosted service like Google Apps for Your Domain eliminates many of the expenses and hassles of maintaining a communications infrastructure," says Dave Girouard, vice president and general manager for enterprise at Google.
"Microsoft will see this as a direct competitor for Office Live," says Matthew Brown, an analyst with Forrester. In preparation for such a move by Google, Microsoft has started offering its own Web-based Windows "Live" business application for smaller companies. Google's service does not have as many features as Microsoft's does, but it also lacks a fee. "That's going to have great appeal to companies that don't need a lot of features and don't mind a lot of ads showing up," says Susan Feldman, an analyst with IDC.
Analysts don't expect the Google Apps for Your Domain to generate much money. "You can't really see any company that's making all their bread and butter through business apps via the Web," says Brown. Financially, "the eBay agreement is perhaps more important than the Google Apps," says Feldman.
Feldman was referring to a separate deal Google also announced on Monday: a multiyear advertising and "click to call" agreement with eBay. Google will become the exclusive provider of text-based advertising on eBay outside the United States, while the click-to-call service makes it possible for potential eBay buyers to talk with sellers over the phone just by clicking on a link. The companies did not disclose specific financial terms of the deal, though it will involve revenue sharing.
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