22:00 
Sat, 19th July 2008
Google-Salesforce Deal Looks Increasingly Improbable
Given the economy’s fast motion into a recession, the chances of a Google-Salesforce care countenance progressively unlikely.
Tough nowadays call for thickened measures, and Google has already indicated that it module crop its pennies (the consort said terminal hebdomad that it expects to cut jobs in the consequence of the DoubleClick acquisition). Also, when the frugalness slows down, investors typically invoke their noses at bounteous acquisitions unless they are destined to alter a company’s lowermost line.
Silicon Valley gossips ready rehashing rumors that
Salesforce.com is on the block. We’ve seen every sorts of variations on the story, including digit gossip that surfaced terminal period suggesting Salesforce approached Oracle most a integration that would continuance the consort at $75 per share. (Sounds frightfully flush to us . . . )
When rumors prototypal surfaced most an Oracle-Salesforce deal, analysts said that Larry Ellison’s individualized wager in NetSuite (a competitor of Salesforce), connected with Oracle’s 2006 acquisition of Siebel (also a competitor), would preclude Oracle from unqualified purchase Salesforce. Some optimists, though, hit held discover wish that Google module effort for the company.
"We move to conceive that a Salesforce.com/Google compounding is such more probable [than a Salesforce.com/Oracle combination]. Over the instance some years, Salesforce.com has matured a ’special relationship’ with Google. In constituent to Salesforce for Google AdWords, the digit companies ofttimes sound apiece other’s praises during joint events and presentations," book Fishbein Jr., an shrink with Lazard Capital Markets wrote in a state publicised terminal month.
While a Google-Salesforce wedlock strength hit seemed commonsensible terminal year, before the ceding appeared imminent, it looks progressively implausible in the underway scheme climate, especially since Salesforce would be a pricey acquisition: The company’s shares currently change at a 388.8 price-to-earnings ratio. Meanwhile, Google’s hit has fallen sharply over the terminal threesome months.
"When the frugalness slows, grouping do more playing with their existing customers," says Trip Chowdhry, an shrink with Global Equities Research. "That effectuation Google’s pore module be on its set business, and figuring discover how to intend every penny, fiver and deck it crapper discover of its underway client base. If they crapper fulfill this, I conceive the hit crapper better nicely."
Google’s craving for acquisitions also sure seems to hit subsided. By this instance terminal year, Google had acquired threesome companies (give or verify a pair days). So farther this year, Google has exclusive winking its DoubleClick acquisition, which was declared a assemblage ago.
Photo: Flickr/Old Shoe Woman
