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Microsoft starts online services

Microsoft Corp unveiled a new strategy to move software and services online, seeking to fend off a growing threat from Google Inc and other nimble upstarts born on the Internet.

With a new Web site called "Windows Live," Microsoft hopes to create a new platform that will unfasten some of its applications from computer hard drives.

The site www.live.com repackages some of the features Microsoft already offers at its heavily trafficked MSN.com, adds more customization tools and makes it easier to view the same products and services at any time from any place -- whether it be a home computer or a mobile phone in a shopping mall.

"It's a revolution in how we think about software," Microsoft chairman Bill Gates told reporters and industry analysts on Tuesday. "This is a big change for ... every part of the ecosystem."

Redmond, Washington-based Microsoft also provided a preview of "Office Live" -- a Web site that will provide online access to nearly two dozen applications designed to appeal to the estimated 28 million small businesses with fewer than 10 employees. That site will be offered on an invitation-only basis early next year.

Likewise, many of the Windows Live services were not yet available on Tuesday.

Microsoft's new online push represents its most ambitious attempt yet to adapt to the challenges and opportunities posed by the Internet while protecting its core franchise of licensing software for installation on a single pc -- a business that made it one the world's most profitable companies.

But Microsoft's long-running dominance is being threatened by rapidly growing companies like Google and Yahoo Inc, which are offering more Internet-based applications and services for free, blurring what's hosted on the Web and what's stored on a hard drive.

The trend makes a computer's operating system less relevant to consumers.

"This is all about Microsoft really pointing all its resources at Google," technology industry analyst Rob Enderle said.

Microsoft brings plenty of muscle to the battle, with US$40 billion in cash. The company's flagship Windows operating system, which controls most computers, gives the company a huge foundation on which to build an Internet platform.

But Microsoft's past could haunt the company, particularly if enough people resent its historic efforts to bully potential rivals -- a strategy that spurred a high-profile antitrust battle with the US federal government.

Microsoft "is asking people to entrust a lot of their lives in the hands of Microsoft," Forrester Research analyst Charlene Li said.

"Trust is a loaded word for Microsoft," she said.
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