In a widely anticipated move to counter Microsoft’s entrance into the on-demand application space, Google and Salesforce have teamed up on a global partnership and announced “Salesforce Group Addition featuring Google AdWords” today.  This jointly developed product will allow a connection between Google AdWords accounts and Salesforce accounts, offering smoother integration and linkage between AdWords and Google accounts.  This first release of a co-developed product is targeted at SMB’s who may already be customers of SalesForce but haven’t hooked AdWords and Salesforce together.

The buzz on the Internet has been speculating that Google and Salesforce would join forces, but many thought it might be more than just a simple integration between SF and AdWords.  Microsoft has been making a strong push into the hosted-apps space with their Live platform, and is expected to move forward with a strategy to offer it’s Dynamics software suite as a hosted application.  This would be a direct competitor to Salesforce.   With Google pushing it’s “Apps” platform, a merger between Google and Salesforce seemed like a natural fit, in part to stave off the looming threat from Microsoft as well as to diversify it’s revenue streams.

First steps in partnerships are often much less glamorous than most would like.  Many were expecting a larger initial engagement between Google and Salesforce right out of the chute and today’s announcement is more evolutionary than revolutionary, but it’s likely to get more intense moving forward.

Salesforce.com, Google Launch SMB Tool via [PCWorld.com]