Microsoft is going 'Live'

Kicking off what he called the "live era" of software, Microsoft chairman Bill Gates said on Tuesday that the company plans to launch new internet-based complements to its core products.

Gates said Microsoft is working on two products, "Windows Live" and "Office Live", that create opportunities for the company to sell online subscriptions and advertising. Both are targeted at smaller businesses and consumers.

The products won't replace the company's ubiquitous operating system or productivity suite, and people don't need to have that software loaded to tap into the web versions. "They are not required to use Windows or Office," Gates said at a press event here.

Gates said that Windows Live is a set of internet-based personal services, such as email, blogging and instant messaging. It will be primarily supported by advertising and be separate from the operating system itself. Office Live will come in both ad-based and subscription versions that augment the popular desktop productivity suite.

"This advertising model has emerged as a very important thing," Gates said.

But free products won't replace paid software. Many of the Live releases will have payment tiers, Gates said, with the lowest levels free and ad-supported, and higher-end versions paid for by the user.

"We'll have licences and subscriptions as well," Gates said. In many cases, companies will have a choice between running software on their own servers or as a Live service.

Acknowledging potential antitrust concerns, Gates said that Windows Live is built off published APIs (application programming interfaces) that its rivals will also have access to.

"It's a dramatic sea change," Gates said of the overall shift to online services. "The live phenomenon is not just about Microsoft. It's partners, it's competitors...the whole space is being transformed."

Ray Ozzie, recently tapped to head Microsoft's services push, joined Gates in detailing the plan.

The internet-based services announcement was widely expected. But Microsoft has kept details of the plan tightly under wraps.

Gates likened the services push to other major strategy shifts at Microsoft, including its December 1995 move toward the web and a June 2000 commitment to web services.