Microsoft readies online Office

SEATTLE

Microsoft Corp. is giving a select group of technology-savvy testers an early peek at its Office 2010 software, but it’s keeping a key development - free Web-based versions of programs such as Word and Excel - under wraps a little while longer.

Microsoft’s launch of this “technical preview” indicates Office 2010 is still on track for release in the early part of next year.

The company is updating its highly profitable desktop software package to add more ways for people to work simultaneously on documents, organize their e-mail and edit videos and photographs, among other changes. And for the first time, Microsoft is adding free companion versions that run in a Web browser.

Microsoft Office is by far the most popular software package worldwide for making presentations, spreadsheets and other documents, and its dominance is in no immediate danger. But the company is trying to defend against a long-developing trend in which software is moving from the desktop to the Web. Google Inc. has been pushing its own free, Web-based programs for more than two years, although it has yet to gain much traction.

With Office 2010, Microsoft must decide how much software it can give away online without undermining its lucrative desktop software business. If it doesn’t make the right calculation, the software maker could find itself in the same position as newspapers that gave online content away and now are struggling to replace print revenue.

In Microsoft’s case, the Home and Student version of Office 2007 is listed at $150, although it can be found on Amazon.com for $90. Such sales deliver attractive margins. In 2008, the division responsible for Office logged $12.4 billion in profit on nearly $20 billion in revenue.

The Office 2010 Web programs will be Microsoft’s first real attempt at an online Office package. In 2007, Microsoft launched something called Office Live Workspace, which let people view and comment on documents, but it lacked tools for creating and editing files.

The browser-based programs are on a different development cycle from the desktop programs, and Microsoft says the Web versions’ “technical preview” will be ready in August.

The Web version of Office 2010 will be free to consumers, in a version supported by advertising. Microsoft will let companies with long-term Office licensing agreements install the online programs on their servers for no extra charge. Companies will also be able to buy subscriptions to access the programs through Microsoft-operated data centers.

Microsoft has not said how much Office 2010 will cost, only that it will sell five variations on the suite, two for big corporations and three available to consumers and small businesses.