Google launches online business software

updated 11:00 a.m. ET Feb. 7, 2008

MOUNTAIN VIEW, Calif. - Google Inc. is introducing an online business software package designed to make it easier for people in the same organization to share documents and information.

The free "Team Edition" software, scheduled to debut Thursday, represents the Internet search leader's latest attempt to attract more users to free applications, which poses a potential threat to rival Microsoft Corp.'s highly profitable word processing, spreadsheet, presentation and calendar programs.

The launch marks the second time Google has upgraded a business program this week — a week when Microsoft awaits a response to its bid to buy Yahoo Inc. in an attempt to undermine Google's dominance of Internet search and advertising.

Microsoft's unsolicited bid, initially valued at $44.6 billion, is backed largely by money the company has made selling software.

Google has been giving consumers, students and businesses free access to competing software hosted over the Web in a concept known as "cloud computing."

More than 500,000 businesses have signed up to use Google's applications, according to figures to be released Thursday by the Mountain View-based company. Some businesses pay $50 extra per user for a souped-up version of the applications, but the fees so far account for only a sliver of Google's $16.6 billion in annual revenue.

Google last year collected $181 million for software sales and other services besides online advertising.

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