Microsoft polishes Office Live offering

Office Live, which is a set of small business services such as email, web hosting and contact-management software rather than an online version of Office, has a few new tricks and is heading out of beta.

Microsoft says it's not opposed to the idea of expanding into online document creation but that's not what small businesses are asking for, according to Marja Koopmans, the software company's director of channel and business strategy for Office Live.

She said: "They are saying 'I'm not looking to replace my desktop." Businesses are more interested in software to close sales and add online marketing. "That's really what we are focusing on with Office Live. We don't rule out anything for the future," she added.

The company has been exploring the idea of online or ad-supported versions of its core word processing and spreadsheet programs, largely within its Works unit.

Rival Google acquired online word-processing company Writely in March and introduced spreadsheet software in June. It launched a combined Google Docs & Spreadsheets product earlier this month.

Microsoft first announced plans for Office Live a year ago, when top executives Bill Gates and Ray Ozzie convened in San Francisco to kick off Microsoft's Live era of software. At the time, Microsoft talked about 20 different online business applications, most prominently programs for web page design, site hosting and email access.

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About 160,000 people have tried out Office Live in the US since testing began in February. Microsoft is also going international with the program, with plans to test the service in France, Germany, Japan and the UK. The US service will exit the beta-testing phase on 15 November, Koopmans said.

One of the big changes since early testing is expanded business contact management software. Another is a program called AdManager, which lets small businesses manage online keyword-advertising campaigns. The initial test version of AdManager works only with Microsoft's own Windows Live Search but Koopmans said the company would like to work with other search engines, both large and small. Some deals are "very close," she said.

Microsoft has been trying to expand both ad-backed options and online services to accompany many of its traditional software businesses, particularly those aimed at consumers and small businesses. On Tuesday, the company announced plans to introduce Office Accounting Express 2007, a free basic version of its small business accounting software.

Office Live will also be integrated with that new accounting software, Microsoft said. The tie-in is key, as it allows businesses to sell their wares through eBay, Koopmans said.

Microsoft is also touting Office Live as a chance for partners to build products that work with its services. It has a handful of partners already offering products, and 100 more just joined an early-adopter program. Microsoft hopes to woo more with a developer guide to be published in November.

Ina Fried writes for CNET News.com