How Will Google Respond to Microsoft Office Live? (MSFT, GOOG)

Includes: GOOG, MSFT
by: SA Editors

Microsoft (MSFT) announced the beta version of Office Live yesterday. Contrary to intuitive thinking, Office Live is not an online version of Word and Excel, but rather a set of web hosting and business applications for small businesses. From Microsoft's website:

Microsoft Office Live provides your company with its own free domain name, Web site, and e-mail accounts. Additionally, Office Live offers expert business management applications, such as customer, project, and document management tools, and a security-enhanced Web site managed and maintained by Microsoft at an attractive price- where you can work together and share information with your employees, customers, suppliers, and contractors.

The question now bandied about the blogosphere is: How -- if at all -- will Google (GOOG) respond? A compendium of answers:

Joe Wilcox from the Microsoft Monitor blog:

Google isn't the target here and, in many respects, neither is the nebulous Web 2.0 concept... Microsoft hopes to generate greater customer value and make new-version Office and Windows upgrades more appealing. MSN has done a tremendous job cranking out new products and services, well ahead of the long Office and Windows development cycles. The point: If Google didn't exist, Microsoft probably still would have embarked on a services strategy.

Microsoft is probably more concerned about a than a Google here. Microsoft's core business is applications and operating systems. Services like negate the value of both applications and operating systems, territory Microsoft won't easily cede. It's no coincidence that CRM is a major Office Live feature.

Phil Sim from Squash:

People have questioned why Google needed to acquire Measure Map. To me, this is the obvious answer. Analytics will be at the heart of Google’s SMB offering. Let’s remember what Google’s core business is. It’s selling advertising. Who is its core customer base? SMBs for whom contextual advertising finally represents a cost-effective marketing mechanism. How much penetration do you reckon Google has into this market? Bugger all.

How can Google most effectively increase its core revenue? By getting more SMBs to do more contextual advertising. How can they do this? By helping SMBs to understand the effectiveness of electronic sales and marketing. How can they do this? By offering SMBs free CRM and marketing analytics...

What’s the Microsoft “offer

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