Microsoft is thinking of responding to Google’s web based word processor Writely and Google Spreadsheet by giving away a basic version of Microsoft Works. Currently priced at $50, Microsoft Works includes a word processor, spreadsheet, calendar and email applications. But a big question remains. How this can be achieved without hurting Microsoft Office sales? Microsoft Office contributes a noteworthy amount of revenue and a free Web-based service can diminish these revenues.
The potential service could be branded under Windows Live, will probably be supported by advertisements and could somehow be integrated with Windows Live Mail. Senior analyst Joe Wilcox from JupiterResearch warns Microsoft that such a move could hurt Microsoft if it is aimed at businesses. He suggests that Microsoft should not attempt to answer every signal of competition to their products. Office Live is currently aimed at getting small businesses online.