Microsoft has intensified competition with Google by
announcing a free web-based version of its Office software.
Office 2010 will include stripped-down versions of Word, Excel,
PowerPoint and OneNote in a strong response to competition from
Google Apps.
Investors responded positively to Microsoft's move, sending
shares almost 3.8% higher to close at $23.23, according to the
BBC.
The announcement comes less than a week after Google announced
it was developing a free operating system, challenging Microsoft's
Windows operating system.
Google's
Chrome OS announcement came just weeks after Microsoft launched
its
Bing search engine, which is designed to challenge Google in
the search arena.
Both companies are investing in online development in response
to user demands for powerful web-based collaboration applications
that are reliable.
Giving millions of Windows Live users free access to the Office
web applications could put $4bn in revenue at risk, according to
The Wall Street Journal.
But analysts say the move is a smart one to keep as many people
as possible using Microsoft applications and is probably worth the
risk.
The move is also unlikely to affect Microsoft's overall business
as the firm makes most of its money from business users of its
productivity software.
Microsoft said it will experiment with placing advertising on
the online applications before making them available, according to
the
Financial Times.
Microsoft plans an early release of web applications to
thousands of testers later this year, followed by a public beta at
the end of the year and a full release in early 2010.