Microsoft mum on whether Google Docs-killer is planned

The latest update to Microsoft Corp.'s Works productivity software is expected to go on sale Wednesday amid renewed speculation that the long-standing, low-end counterpart to Microsoft Office is also being groomed to take on Google Inc. in the online office software market.

Aimed at students and other customers unwilling to shell out for Microsoft Office, Works includes a word processor and spreadsheet along with several other applications. It lacks many of the advanced features in Office and uses different file formats than the .doc or .xls used by Word and Excel.

That doesn't change in the new Works 9.0, though users will be able to natively open and save in the new Office 2007 formats. Works also sports a redesigned central task launcher based around popular document templates, as well as live links with Microsoft's MSN Web portal.

Available in 32- and 64-bit versions of Windows XP and Vista and in 15 languages, the US$49.95 Works 9.0 is already available to OEMs, according to a mid-July webcast by a mid-level Microsoft manager, Paul Matt.

Multiple resellers worldwide list Works 9.0 as going on sale Wednesday -- just in time for the key back-the-school season - for a street price of about $40. Works 9.0 is already bouncing around on peer-to-peer networks such as BitTorrent.

One OEM version of Works 9.0 seen by Computerworld easily installed itself without the need for a product activation key. It did not display any Web advertising.

With the rise in interest in cheaper or more streamlined alternatives to Office and Works such as OpenOffice.org or Google Docs, there has long been speculation that Microsoft plans to overhaul Works and offer it as a free, ad-supported software -- either still installed on PCs or as a service via the Web. ZDNet's Mary Jo Foley reported Monday that Microsoft is releasing a free, ad-supported version of Works, citing an interview last week with Microsoft's new head of search and advertising, Satya Nadella. That follows a BusinessWeek story last September in which another Microsoft executive said the company is planning to offer free and subscription versions of Works hosted on its Office Live Web sites.

Through a spokeswoman, Microsoft declined to comment. On the webcast aimed at Microsoft partners, Matt did not mention any Web-hosted or ad-supported versions of Works, which was first released for DOS in 1988.

Chris Swenson, an analyst with NPD Group Inc., expects Microsoft to eventually announce a hosted version of Works, though he doesn't see a desktop version going away anytime soon. "Microsoft is pushing the envelopes," he said. "But you'd be surprised how many customers want their Works bits on their hard drive."

The last major release, Works 8.0, came out in 2004. Once viewed as a key defense against competitors such as WordPerfect, Works' tiny revenue makes it a product Microsoft can safely push into the SaaS arena without fear of cannibalizing its own sales. Not that Microsoft fears that, having moved earlier this year to try and upsell consumers from Works to Office.

It is promising that PC makers who bundle copies of Works 9.0 along with 60-day trials of Office 2007, will receive a cut of revenues if and when customers upgrade, such as to its $150 Home and Student edition of Office 2007.

According to Matt, Microsoft also plans to discontinue at the end of the year its Works Suite, which bundled Works along with Word and other software such as Encarta Encyclopedia and Microsoft Money. It will be replaced by a new product called Works Plus 2008 that includes Works 9.0 and Office 2003 but no other software, Matt said.

That software will be available to OEMs in mid-August. No price was disclosed.

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