Many, for example, create a document using Excel, then upload it to the Web to share with colleagues, who may read and edit the spreadsheet using a Web-based program such as Zoho Sheet or Google Docs.
"Web-based tools are not taking share away from Microsoft's desktop Office suite," Webster said. "But to the extent that these products are complementary, Microsoft needs to get in the game. They risk losing users as people get more comfortable using Web-based tools. And they risk losing their edge."
Microsoft's group product manager for Office, Chris Bryant, said its customers were increasingly using the Web to share and edit documents.
"It's something our users have said they'd like," Bryant said. "Customers are telling us they expect to use the Web-based applications as companions to their desktop software."
Bryant declined to outline how Microsoft would make money with the move, but hinted that business models could include advertising and fees for premium services such as online storage of large files.
The free versions won't include all the features of the desktop software, priced between $70 for a basic student version and about $350 for the professional version. For the upcoming software suite Office 2010, Microsoft plans to let users edit video in PowerPoint and manipulate images in Word -- features that would be unavailable in the free versions.
Investors didn't appear to be concerned about Microsoft's proposed giveaway. On Monday its shares gained 84 cents, or 3.7%, to close at $23.23.
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alex.pham@latimes.com
