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February 14, 2008

Microsoft revamps Office Live Small Business

Posted by David Hunter at 2:08 PM ET.

Over the weekend Microsoft revamped their Office Live Small Business offering (which is the new name for the original Office Live which has little to do with Microsoft Office). Scott M Fulton III at BetaNews has a nice summary of the changes:

This morning, the company’s long and winding strategy for the Office Live brand took yet another turn, with Office Live Small Business now being retooled as a service to enable businesses to set up their own Web sites, buy and sell goods and services online, and track their customers’ preferences and online behavior.

The move takes the middle tier of Office Live services that Microsoft began offering last October for nominal fees, and relocates many of those services to the free tier. Customers can now establish Web presences using a Web site builder tool for free. Up to 100 branded e-mail accounts are now available for free for the first year, $14.95 per additional year. In addition, free e-mail accounts have been upgraded to 5 GB of storage (Web site storage remains at 500 MB) and online applications (yes, they’re still there) come with 500 MB of free storage, upgradable in paid increments. Also, new tools have been added to enable synchronization with Microsoft Outlook.

As Office Live Small Business director of marketing Michael Schultz told BetaNews, his company’s objective is to become a one-stop shop for SMBs to establish their online presence.

Microsoft claims to have 550,000 customers for the current Office Live Small Business and while Web hosting for small businesses is lucrative for other players since it essentially provides a captive revenue stream, it’s a trifle difficult to see why Microsoft wants to play nearly without pay.

Fulton suggests that Office Live Small Business serves as an intro to other Microsoft services like the adManager search marketing tool which “allows users to advertise across multiple sites and search engines, including MSN, Live Search,, and” I’d observe that anyone doing serious Web advertising will be significantly unhappy with that selection, but the general point is still valid. Still, I would suggest another reason for Microsoft’s generosity is to head off small businesses before they fall into the clutches of Google Apps and put a real crimp in Microsoft’s revenue stream.

Filed under Coopetition, Google, Microsoft, Office Live, Office Live Small Business

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