Salesforce shares up on speculation of Google deal

BOSTON Wed May 30, 2007 5:24pm EDT

A general view of the Google headquarters in Mountain View, California, May 15, 2007. Salesforce.com Inc. shares climbed 7 percent on Wednesday after the software company said it plans to make a ''significant announcement'' next week with a Web company that analysts say could be Google Inc. REUTERS/Robert Galbraith

A general view of the Google headquarters in Mountain View, California, May 15, 2007. Salesforce.com Inc. shares climbed 7 percent on Wednesday after the software company said it plans to make a ''significant announcement'' next week with a Web company that analysts say could be Google Inc.

Credit: Reuters/Robert Galbraith

BOSTON (Reuters) - Salesforce.com Inc. (CRM.N) shares climbed 6 percent on Wednesday after the software maker said it plans to make a "significant announcement" next week with a Web company that analysts say could be Google Inc.

(GOOG.O).

An invitation to journalists and analysts said Salesforce Chief Executive Marc Benioff and a "special guest" with a strategic partner would discuss details of the announcement on June 5, at a lunch in San Francisco.

Analysts said the announcement could be an expansion of a relationship between Salesforce and No. 1 Web search provider Google. Salesforce spokesman Bruce Francis declined to elaborate on the invitation or comment on the speculation.

Google spokesman Oscar Shine said his company does not comment on rumors or speculation.

Both companies offer software over the Web through what is known as an on-demand model.

Salesforce's software helps companies manage sales and marketing. Google business programs search databases and also include recently launched products that companies use for word processing, presentations and spreadsheets.

Benioff has vowed to gradually wean his company's staff off Microsoft Corp.'s (MSFT.O) Office software in favor of Google products, a process that he started with his marketing team.

Global Equities Research analyst Trip Chowdhry said the wording of the invitation, which described the Internet partner as a Bay Area company, suggests it could be Silicon Valley-based Google.

It would make sense for the two companies to work more closely in areas such as product development and marketing, Chowdhry said, in a bid to better compete with Microsoft, the world's No. 1 software maker.

"Some sort of technical and marketing partnership between the two companies would give Salesforce and Google a stronger offering," he said.

Salesforce shares climbed $2.82 to $48.72 in heavy New York Stock Exchange trade. Google rose $11.49 to $498.60 on Nasdaq.

(Additional reporting by Eric Auchard in San Francisco.)

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