Reality Check | Ephraim Schwartz » Google, Salesforce miss the mark

June 04, 2007 | Comments: (0)

Google, Salesforce miss the mark

TAGS: Web 2.0

Group Edition isn't the killer app the industry was hoping for

Is the Google-Salesforce announcement of a new, jointly developed application just smoke and mirrors, or is it the start of something big?

Certainly Group Edition, which combines Google's AdWords with Salesforce's CRM lead-generation feature, is not the big announcement we were all expecting when I wrote a blog last week, Google, Salesforce may make software history.

If there had been something nifty about how Group Edition replaces Team Edition, the entry-level CRM SaaS (software as a service) application for small businesses, there might cause for excitement. But I question whether there is anything new here at all.

Google AdWords, for the uninitiated, allows companies to buy the right to have their business linked with keyword searches. In other words, when someone searches on a keyword you have bought advertising rights to through AdWords, a link to your company's Web site will show alongside nonpaid results relevant to that particular search.

So now Google AdWords will be promoted in Group Edition. A user wanting to sign up can punch out from Group Edition to Google and sign up. Zzzzzzzzzzzzzzz.

Let's say you take that step and a search for, say, baseball bats brings up the name of your sporting goods store and the user clicks on your link, it is still up to Salesforce to get that potential customer to fill out a lead form in order to identify himself. Typically a company can offer an incentive, a Webinar or perhaps a topic white paper, if the visitor fills out a name capture form. Zzzzzzzzzzzzzzz.

The only difference now is that the Google AdWords stats can now be incorporated into the Salesforce lead-generation form, giving salespeople more data on the customer, such as how long they stayed on the site, what they looked at, and so on.

Because Google will give a small portion of its ad revenue to Salesforce if a Salesforce customer signs up for Google AdWords with no reciprocal revenue exchange on Salesforce's part, the immediate benefit goes to Salesforce. However, Google hopes that Salesforce will sell the heck out of the new co-designed site so that Google can garner an entirely new market for its AdWords product.

For my money, it doesn’t even qualify as a great mashup; rather, it is just an improved interface. One plus one still only equals two, with the only change coming from the fact that salespeople can now see all the data in one place.

Now consider that Google has about 900,000 AdWords customers, but most of them are very small companies paying pennies per keyword. While Salesforce is in fact courting the enterprise customer more and more, the majority of its 650,000 users are small businesses, too.

Yes, nickels and dimes add up, but SMBs don’t set the course for how companies do business in the future. That kind of leadership comes from the enterprise level.

Enterprise Applications Consulting lead analyst Josh Greenbaum says Google needs some kind of capability to team up with the enterprise.

"They don’t get where the key inflection points are," Greenbaum says.

For more of Greenbaum's take on Salesforce and Google, check out "The Salesforce/Google Killer App: Not coming anytime soon."

Naturally Google is trying to make more of what they are doing -- driving ad revenue to the bottom line. But that's not strategic. This announcement should have been about a killer alliance and a killer application for the enterprise.

Of course, both companies still have that opportunity, but the window won't stay open forever. They need to do something this year, or some new upstart may just come along and capture the imagination of big business.

Posted by Ephraim Schwartz on June 4, 2007 09:42 PM

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