Sun Keeps Rising on Google Talk

Updated from Oct. 3

Shares of Sun Microsystems(SUNW) shot upward again Tuesday, propelled by news a day earlier of a "collaborative effort" with Google(GOOG) to be announced Tuesday.

After moving 26 cents higher on Monday, shares of Sun recently gained another 27 cents, or 6.1%, to $4.46. Google shares were up 45 cents to $319.13.

Sun announced on its Web site Monday that CEO Scott McNealy and Google CEO Eric Schmidt will hold a news conference at 10:30 a.m. PDT Tuesday at the Computer History Museum in Mountain View, Calif., to "discuss joint activities." No additional details were provided.

Several analysts who follow the companies declined to speculate on what the two companies could be working on together.

But with Google reaching its tentacles into numerous areas -- from its core Internet search advertising to most recently creating a WiFi network in San Francisco -- the possible activities that the Internet company could be undertaking with Sun are numerous.

One possibility tossed around on message boards centered on Google distributing Sun desktop productivity StarOffice software. Such a joint venture would aim directly at Microsoft's(MSFT) dominance on the desktop, which Sun has been unable to dent.

Microsoft has picked up its Internet efforts recently in response to Google, whose introduction of a rival desktop search product, email and instant messaging services has intensified the competition between the two juggernauts.

Analysts have suggested that Google may be in the best position to challenge Microsoft's desktop monopoly by offering competing software via the Internet.

And on Saturday, Sun Chief Operating Officer Jonathan Schwartz dedicated his blog to software distribution -- and some ominous-sounding pronouncements.

Perhaps hinting at a big announcement between Sun and Google, Schwartz wrote, "If I were a betting man, I'd bet the world was about to change."

And, Schwartz added that he would bet a recent decision by the commonwealth of Massachusetts to eventually replace Microsoft Office with open-source software "will be a shot heard 'round the world."