Google launches Apps advertising blitz

 

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By Reuters

Posted on 21 Oct 2009 at 08:09

Google is launching an advertising campaign to lure customers away from Microsoft and IBM.

The campaign, which starts this week in countries such as the UK, France and Japan, represents a rare foray by Google into mass-market advertising and underscores increasing competition to provide businesses with email and other office software.

While Microsoft and IBM dominate the market for enterprise email, Google is trying to convince businesses to switch to its cloud-based services.

Recent high-profile outages - including two in Google's GMail last month - have raised questions about the reliability of online software for business users.

Google says Apps is used by two million businesses, up from 1.75 million in June

But Gartner analyst Tom Austin says most businesses will eventually switch to cloud-based email, although the process may take years. He notes IBM and Microsoft have introduced cloud products recently, and that Cisco appears to be preparing to offer its own cloud-based software.

On Thursday, Google CEO Eric Schmidt told investors during the company's quarterly earnings conference call that he intended to boost investments in new business initiatives.

Google's Apps business - which the company has said is profitable and generates hundreds of millions of dollars in revenue a year - is a tiny portion of Google's overall business, which yielded almost $22 billion revenue last year.

According to spokesman Andrew Kovacs, its Apps team has doubled over the past year to more than 1,000 employees.

Google says Apps is used by two million businesses, up from 1.75 million in June. Those include both larger businesses that pay $50 a year per user for Apps, as well as firms with fewer than 50 employees that get the software for free.

The company also claims there are now 20 million active users of Google Apps, up from 15 million in June, although that number included students who use the free version Google provides to universities.