Microsoft Office 2010 to include free, online versions

Hey, maybe there's something to this Internet phenomenon after all.

Microsoft, after tiptoeing around in the online app space for many months, is finally diving in headfirst in the move from offline software to the web. Office 2010, the next big release of its productivity application suite, in addition to traditional installable versions, is also going to come in an online-only incarnation, similar to -- and a direct response against -- Google Apps.

Microsoft already offers some online services in the form of Windows Live and Office Live, but these are limited to basic collaboration tools (email, calendars, etc.) and building business websites rather than creating and editing documents via a web browser. Office 2010 will mark Microsoft's first serious foray into online productivity.

Early screen shots are promising, and the online versions of Office 2010 -- which includes Word, Excel, PowerPoint, and OneNote -- look more feature-filled than I'd imagined they would. Microsoft has said the apps will be stripped down somewhat, which is to be expected of a free product, but so far they certainly don't look like they veer into the simplistic world of, say, the Windows Notepad.

All you'll need to access the online apps is a Windows Live account (which is free) -- though it's unclear whether premium features will be available for users who pay extra. We'll likely find out soon enough: A public beta is planned for release before the end of the year, with final availability in the first half of 2010.

The move is a seriously risky one for Microsoft, of course. Office is perhaps the company's greatest cash cow, and the Wall Street Journal estimates that the company could lose up to $4 billion due to lost sales of the offline version of Office 2010. And yet progress is forcing Microsoft's hand, really. Innovate or die.

As for Office 2010's new features, both the online and offline versions look quite similar to the current Office 2007, but a few key tweaks are in store for users. The Ribbon is going to remain in the picture with a few changes, along with enhancements to the way Office manages printing, tweaking copy and paste to offer users a "preview" of what a pasted object might look like, enhanced photo editing, faster emailing, and upgraded search. PC World has an extensive rundown of the new features here.