Microsoft to launch web based Word and free streaming music service

Microsoft has upped the stakes in its competition with Google as it unveils a free web-based version of its Office software due next year, and hints of a wildcard in the works -- a free streaming music service for UK users to be released by the end of the month.

Office 2010 will include very basic versions of Word, Excel, PowerPoint and OneNote when it rolls off the production line early 2010.

The web based software will allow access to documents anywhere with an internet connection, stored via "cloud" computing, much like Google Docs, the search giant's online word processor.

Today, the Daily Telegraph reported that Microsoft is planning to launch a free streaming music service by the end of July, modelled after the popular Spotify platform, where users get free access to tracks in exchange for advertising.

Like Spotify, Microsoft is said to be offering a paid-for-premium option with its service, tentatively known as Bing Music, which will extend the brand of its search engine and its efforts to take on Google.

Hazel Thompson, MSN spokeswoman would not confirm the rumour, but said: "In the coming months, MSN is planning a new music service in Beta via its Music channel in the UK.

"At this stage we won't be confirming the details behind this but more information will be available soon and will be communicated in due course."

Last week Google stepped into Microsoft's territory by announcing its plans for new operating system to rival Windows, which followed Microsoft's launch of a new search engine Bing in June.

Though the two companies appear to be going blow for blow in a large scale tech battle, it's likely they won't be making any dents in each other's revenue stream.

Google, which pulled in $22bn in revenue last year, makes a large majority of its money, about 97%, from its AdSense advertising programme.

Microsoft, on the other hand, sold more than $14bn worth of its Office products in 2008, with a further $16bn in revenue through the sale of its operating systems, including Windows Vista, XP and Mobile.