Google doing the business

Google, which is fighting Microsoft for corporate customers, says demand for its business applications is accelerating.

Google now has two million business customers, up from 1.75 million in June, says Rajen Sheth, senior product manager for the applications, called Google Apps.

The company charges US$50 ($66) a user a year. Companies with fewer than 50 employees can use a free version that is supported by advertising.

"The business itself is accelerating," says Sheth. "It's definitely an emerging business within Google which we're investing in really heavily."

Google, which gets almost of its sales from search-based ads, is branching out into business software that includes email, word processing and spreadsheets.

The programs, accessed over the web, compete against Microsoft's Office. Google also competes with Microsoft on mobile phones and is developing software that provides an alternative to Windows. The company is now mounting an advertising campaign in a bid to to win over customers in countries such as Britain, France, Australia and Singapore.

Google this month announced plans to resume hiring and acquisitions, after the recovering economy helped third-quarter sales beat analysts' estimates.

"We weathered what is an incredible recession," says chief financial officer Patrick Pichette. "If you have all this behind you, the only outcome you should have as management is: 'Okay, let's build now'."

"They are probably the most acquisitive company in technology right now," says Gene Munster, an analyst at Piper Jaffray in Minneapolis. "There are probably 50 companies out there they could acquire that will make their ads more relevant."

Google has maintained its dominance in the search market, warding off an attack from Microsoft's Bing.

- BLOOMBERG