Sun and Google shake hands

The partnership begins with a modest step: Within 30 days, the Google toolbar will become a standard part of the software people get when they download Java from Sun's Web site. The Java Runtime Environment is downloaded 20 million times per month, Sun Chief Executive Scott McNealy said.

"What Netscape did for the Java Runtime Environment, we believe the JRE can do for the Google toolbar," McNealy said at a news conference here, referring to the 1995 deal Sun made with Netscape, then the dominant maker of Web browser software, that helped legitimize and popularize Sun's Java software technology.

Sun also will benefit from the toolbar bundling. "There is direct monetary value for us from being a distribution mechanism for the toolbar," said John Loiacono, Sun's executive vice president of software. And Google will significantly increase its purchasing of Sun servers, though neither company would say which models.

The partnership matches two companies with a shared vision of a world being remade by ubiquitous computer networks. Where Sun wants to provide the back-end infrastructure such as servers at Google, eBay and SalesForce.com, Google wants to be part of the daily lives of everyday computer users.

The software the companies are working on all directly compete with Microsoft--for example, Java provides an alternative programming foundation to Windows and Microsoft's .Net, and OpenOffice competes directly with Microsoft Office. The Google Toolbar, meanwhile, leads to Google's services and not those Microsoft is trying to promote through MSN.

Google CEO Eric Schmidt sidestepped any direct mention of competition with Microsoft. But in an interview, Sun President Jonathan Schwartz was less reserved. "Do you see Google joining forces with Microsoft on the evolution of .Net? Last I checked, no," Schwartz said.

Next up: meeting the high expectations the companies have set. "The pressure of perception is on them to move this forward quickly," said Michael Dortch, an analyst at Robert Frances Group.

But Dortch expects the collaboration will be fruitful. "This is driven at a more grassroots level at both companies," which both promote open-source software, sharing and participation, he said. "I'm confident other stuff will come quickly. There's too much money and reputation on the line."

The companies envision further software distribution deals, too, a partnership Schwartz believes will become more significant as network bandwidth increases and its costs decrease. "We're talking about putting our assets together so we can leverage each other's distribution," Schwartz said.

Part of that work will include Google helping to spread OpenOffice.org, Schmidt said. "We'll work to make the distribution of it more broad," he said.

And OpenOffice.org will be endowed with a Google search box--assuming the open-source community that develops it can be persuaded--Schwartz said in an interview. That persuasion shouldn't be too hard; Sun, which made the decision to release the source code for what now is OpenOffice, still has heavy involvement in the project.

Many elements of the partnership remain secret, but Sun executives offered some hints and details.

The companies will conduct joint research and development and joint marketing, Loiacono said, and Google will increase its involvement in the Java Community Process and other technologies.

McNealy said Google will become involved in Sun's open-source OpenSolaris. "There's a huge alignment strategy with research and

Google and Sun already have ties. Among them: Schmidt was Sun's chief technology officer in the 1990s. John Doerr, a venture capitalist at Kleiner Perkins Caufield & Byers, is on the board of both companies. Andy Bechtolsheim, a Sun co-founder who returned to the company to launch its Galaxy servers, wrote a check for $100,000 that helped get Google started.

The financial terms of the deal weren't disclosed, but McNealy indicated that sizable sums could become involved. "There's going to be a lot of money flowing both ways, if we do this thing right," he said.

One area of potential investment is in the purchase of Sun servers. Sun wants once again to be the "dot" in "dot-com," McNealy said, and because customers tend to follow influential leaders, the Google deal will be significant. "If you go to the eBay Web site, you see 'Powered by Sun.' SalesForce.com runs on Sun. Now we have a partnership with Google. That sends a very clear message to the Web sites," McNealy said.

No shopping list
Schmidt wouldn't outline what Sun hardware Google planned to purchase. "We're already a Sun systems customer, and we're going to extend that quite significantly," he said.

One question is how the partnership will help advance Sun's vision that "the network is the computer." Google has a powerful data center packed with computers and a personal connection to millions of computer users, making it a powerful ally for Sun in the idea of moving computing applications off desktop PCs and onto central servers. In addition, Google is a developer of AJAX, which gives Web browsers a more sophisticated user interface.

That networked vision, of course, would make Google more of a threat to Microsoft than it already is.

Office productivity software such as Microsoft Office is very different from the tools used for Web services tasks such as search, e-mail and Web site authoring, Schmidt said. But he added, "It makes sense from my perspective that these boundaries become less obvious as these technologies improve."

Sun once had a Java-based version of StarOffice called StarPortal that was geared to run across the network. The product aimed to help a network service company compete more directly with Microsoft, but the company canceled it. Schwartz said he has no regrets: "Is AJAX or a browser an appropriate vehicle for heavyweight office productivity software? Absolutely not," he said.

Mark Mahaney, an analyst for Citigroup Research, wrote in a research note that "for many years, Scott McNealy, the CEO of Sun Microsystems, talked about the network replacing the PC as the platform. In hindsight his pitch was much too early...However, today's announcement indicates that perhaps the Internet can become the platform for applications delivery."

For Google, the deal could boost revenue, Mahaney said. "The simple point is that a potential offering of a network-based application suite could lead to long-term incremental revenue for Google."

The announcement appears to bolster the prediction made by Stephen Arnold, author of "The Google Legacy: How Google's Internet Search is Transforming Application Software" that Google aims to become a hosted applications provider.

"This is the first step on the road that leads directly to Google and Sun trying to take Microsoft's application and server revenue," Arnold said in an interview. "It's the foothills expressway to money; that's the goal."

The partnership will undoubtedly please the Unix developer community, he said. "The 40-year-old who really understands Unix and Solaris and doesn't feel comfortable with the security vulnerabilities of a Microsoft Office. Suddenly there's the promise of a new land ahead," Arnold said.

Microsoft executives declined to comment on Tuesday's announcement.

CNET News.com's Elinor Mills contributed to this report.