Google's Battle in Business Software

The search giant is bent on taking on Microsoft, but its Google Apps' slow progress shows just how difficult that can be

With Google's (GOOG) announcement that it's creating an operating system to compete with Microsoft's (MSFT) Windows, the search giant and CEO Eric E. Schmidt look increasingly determined to undermine Microsoft's core software businesses. But Google's struggles on another front suggest the company may have a hard time gaining much traction against Microsoft.

Two years ago, when Google plunged into business software, it cited General Electric (GE) as one of its marquee customers. GE had begun using Google applications for tasks typically handled by Microsoft Office, which includes word processing and spreadsheet software. Now GE is rethinking the relationship. While still using Google Apps for some employees, it's testing similar products from a company called Zoho and considering the online versions of Microsoft's Office. "We look at it as a race" for GE's business, says Greg Simpson, chief technology officer at GE.

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Software Company Sues Google For Trademark Infringement

Rosetta Stone, maker of the popular foreign language software, filed a federal trademark suit against Google in Virginia today, alleging that one of the Web giant’s major advertising programs allows companies to confuse consumers.

The suit, filed by Gibson, Dunn & Crutcher partner Terence Ross at the U.S. District Court for the Eastern District of Virginia, is just latest to target Google for its AdWords program, which lets companies buy advertisements that run alongside its search engine results. The ads are triggered by certain keywords, and show up as “sponsored links.”

According to the complaint, since 2004, Google has let companies attach their ads to trademarked keywords they do not own. So a search for Rosetta Stone might bring up the company’s official Web site, as well several paid advertisements for its competitors. Google also allows companies to use those trademarked terms in the headlines of their ads.

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