What is known: Google is buying computers from Sun. Sun is buying ads from Google. And the companies are bundling Google's Toolbar and Sun's Java, both pieces of free software designed to improve the Web-surfing experience. Terms of the deals were not disclosed.
From an Associated Press story:
"There really isn't much depth to this partnership," said industry analyst Rob Enderle.
"I think Eric [Schmidt] is doing this as personal favor for Scott [McNealy]," he said. "It provides a certain amount of press and visibility to Sun when there hasn't been very many positive things going on at the company."
So the benefits for Sun are obvious. What I don't understand is what this means for Google. They don't appear to have a huge investment in Java or the J2EE stack. There doesn't appear to be much synergy there. They have been playing with free email and other web applications, but Gmail is still in Beta after 1-1/2 years. They have a very successful search engine and advertisement-based revenue model. Does Google really want to take on Microsoft Office?
My guess is the founders are too smart for that -- unless they just aren't old enough to remember Borland, Lotus, Novell, Corel and the other losers in the office suite wars.