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Edition: U.S. Article Comments (0) Slideshow Follow Reuters Google group keeps sights on Microsoft in new era Tweet Share this Link this By Alexei Oreskovic SAN FRANCISCO (Reuters) - When a recruiter pitched Dave Girouard a job at Google Inc seven years ago to sell technology to other companies, he had the same question many are asking today. "Why does Google have an enterprise... Email Print Related News Google group keeps sights on Microsoft in new era 1:26pm EST Google woos publishers with One Pass payment service Wed, Feb 16 2011 UPDATE 3-Google woos publishers with digital payment service Wed, Feb 16 2011 Dell blows past targets, but doubt persists Tue, Feb 15 2011 Special Report: Can Japan's spirited youth save their aging nation? Tue, Feb 15 2011 Analysis & Opinion Middle East protests spur new look at corporate risk disclosures globally -Westlaw Business Disclosures: Risky Business Google sprinkles search results with social networking, but leaves out Facebook Related Topics Technology » Media » Stocks 1 / 2 Dave Girouard, president, Enterprise for Google , Rajen Sheth, group product manager for Chrome OS for business, (R) and Shan Sinha, group product manager of Google Apps (L) pose for Reuters at Google headquarter in Mountain View, California, February 16, 2011. Credit: Reuters/Norbert von der Groeben By Alexei Oreskovic SAN FRANCISCO | Fri Feb 18, 2011 3:53pm EST SAN FRANCISCO (Reuters) - When a recruiter pitched Dave Girouard a job at Google Inc seven years ago to sell technology to other companies, he had the same question many are asking today. "Why does Google have an enterprise business? Are they serious about that?" recalls Girouard of one of the world's largest consumer Internet companies. In a company where advertising accounted for 96 percent of 2010 revenue, Girouard's role selling Web-based email and productivity software seems out-of-place -- even as his team has swelled to more than 1,000 employees. Google's enterprise business positions it to tap into a lucrative market long dominated by Microsoft Corp and represents one way to diversify revenue. But with the giant Internet search company facing a big threat from Facebook in social networking and from Apple Inc in the mobile market, some question whether Google's battle with Microsoft for business customers is yesterday's war. That point will be particularly poignant as co-founder Larry Page prepares to take the CEO reins from Eric Schmidt, a former chief of Novell, in April. While Schmidt's business experience and perspective were shaped at a time when Microsoft was the technology industry's dominant power, it is not clear whether Page shares the same worldview. "It's hard to see Larry focusing more on it (the enterprise business) than Eric did," said BGC analyst Colin Gillis. Google's commitment to the enterprise business will not waver, Girouard said in an interview at the company's headquarters last month. Page, he noted, has been involved and supportive of the enterprise business from Day One. "We are building out a team that's headed toward building a business of billions of dollars," he said. "And Larry is a smart, competitive guy; he knows it's a giant, giant market opportunity." Google, which generated roughly $29 billion in total revenue last year, does not break out financial details for its enterprise business, though it has said in the past that the business is profitable and generates hundreds of millions of dollars in annual revenue. Girouard, who is the president of Google's enterprise business, said the group's revenue growth rate has accelerated every quarter for the past two years. Revenue is now growing faster than any other cloud-computing company, he said, including Salesforce.com, which grew 30 percent year-on-year in its fiscal third quarter. Yun Kim, an analyst with Gleacher & Co, said investors are currently paying more attention to display advertising and mobile advertising than they are to the enterprise business as Google's next big growth opportunities. But he said the enterprise group allows Google to leverage its extensive network computing infrastructure and to cross-sell to many of the same small and medium-sized businesses that are already Google's advertising customers. The use of so-called cloud-based email by corporations is still in early stages, said Tom Austin, an analyst at research firm Gartner. But he expects that 10 percent of companies with 500 people or more will have stopped maintaining their own email infrastructures and switched to Web-based email by the end of next year, or early 2013. "At that point we expect the market to tip and the growth to accelerate significantly," said Austin, noting that the competition between Google and Microsoft in the online email market is closer than he had initially expected. SOCIAL BUSINESS 1 2 Next Technology Media Tweet this Share this Link this Digg this Email Reprints We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. Comments (0) Be the first to comment on reuters.com. Add yours using the box above. Social Stream (What's this?) © Copyright 2011 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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