Stephen Elop, president of the Microsoft Business Division, said the "rich client experience" of Office combined with the online service provides "a seamless computing experience for our 500 million Office users worldwide."

Real-Time Sharing

Up to a thousand Office documents can be stored online and shared in Office Live Workspace. Documents can be viewed and commented on in the browser, simple Web lists and Web notes can be created, and, when integrated with Microsoft SharedView, documents can be shared in real time.

The service also offers new features, including an activity panel, direct links, and multifile uploads, which the company said came from feedback in early testing.

The activity panel has an at-a-glance view of all activity in a work space, e-mail notifications about changes, a work-space item can be bookmarked, and multiple files can be uploaded simultaneously by dragging and dropping.

Michael Silver, an analyst with industry research firm Gartner, pointed out that Office Live Workspace does not provide the full Office capabilities online, but is an "add-on for collaboration and small business management" to provide storage , version control and other online features. It is not, he said, what Google Docs is.

Google Docs Not a Major Threat

Google Docs is a free, hosted suite for documents, spreadsheets and presentations. Google, which has become Microsoft's biggest competitor in several areas, also released Google Sites last month, allowing users to create team sites. Various document types can be stored and shared, including text-based documents, video, photos, calendars, file attachments, and presentations.

Google also recently launched Team Edition of Google Apps, which allows users to set up online work groups if they have e-mail addresses within their company's domain.

Silver said he expects Office Live Workspace will disappoint users for whom the Office brand has come to represent the suite's full capabilities. He said Microsoft may eventually have an online product that is closer to Office's full features, but for now Google Docs is not a threat to Office.

But there is enough of a threat -- or opportunity -- that Microsoft is clearly moving, step by careful step, its properties onto the Web. Yesterday, Microsoft announced that its online business services, which draw upon the features of Exchange, Sharepoint and other products, would be available to companies with less than 5,000 employees, its previous threshold.