Microsoft counterpunches with free Web-based version of Office

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Take that, Google Docs!

Microsoft today said it will make a free Web-based version of its popular Office suite for the 400 million people who have its Windows Live service. The product, which would include lightweight versions of Word, Excel, PowerPoint and OneNote, would debut next year and compete with Google’s free online Google Docs suite.

Like Saturn eating its young, Microsoft risks cannibalizing its most profitable business in doing so, says Reuters. The Redmond, Wash.-based business software division, which includes Office, made $9.3 billion in profit from $14.3 billion in sales during the first three quarters of its 2009 fiscal year.

The announcement is the latest tit-for-tat in an increasingly intense rivalry between Microsoft and Google. The Mountain View, Calif., search giant last week said it would develop an operating system designed to lure users away from personal computers, Microsoft’s home turf, to using applications on the Internet, where Google has a dominant presence.

Dubbed Chrome OS, the software would be made available to the open-source community, which implies that it would, like Android, be free, unlike Microsoft’s Windows operating system, which powers more than 90% of the world’s computers.

Here’s another way that Google and Microsoft compete. Both are in contention for the title of technology’s 800-pound gorilla, a designation that entitles the winner to intense regulatory scrutiny, fear and distrust. As tech blogger Anil Dash pointed out, inheriting the mantle means being subjected to the axiom of ‘Hanlon’s Razor’ -- once a company dominates its market, mistakes from oversight or stupidity will be attributed to malice.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.