GOOG Starts to Monetize Google Apps, "Brutal" Timing for Microsoft

Includes: GOOG, MSFT
by: Steven Towns

Google is set to announce a $50 subscription-based version of Google Apps for corporations today, similar to the free version it launched last year, but more reliable with 99.9% uptime, more storage space and 24x7 tech support. Google executives claim it is not taking on Microsoft, but CEO Eric Schmidt comments, "Our product is so cheap that it's sort of no-brainer to try it out." Google-Microsoft-1yr-chart-02-21-07 GE and Procter & Gamble are two early-adopting blue chips. Google said over 100,000 small business and hundreds of universities already use the free Google Apps. An analyst at Nucleus Research says the timing of Google's service "is just brutal for Microsoft" since its low cost could delay corporate purchases of Office 2007. Microsoft's director of the Office suite, meanwhile, says his company welcomes the competition because "It helps keep us on our toes." Microsoft is also expanding online with Windows Live, building online services around its desktop Office software suite.

Sources: Associated Press, InformationWeek, The Wall Street Journal, New York Times, TechCrunch, GigaOM
Commentary: Google Gets More Search Share, AgainThe Great Vista-Inspired PC Boom?Ballmer Says Some Analysts' Vista Estimates 'Overly Aggressive' -- Street Reacts
Stocks/ETFs to watch: Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT). Competitors: (NYSE:CRM), IBM (NYSE:IBM). ETFs: Software HOLDRs (NYSE:SWH), Technology Select Sector SPDR (NYSEARCA:XLK), iShares Goldman Sachs Technology (NYSEARCA:IGM)
Related: Google Apps homepage

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