Will Google Threaten Microsoft Office?

The recent acquisition of an online word processor by the search giant raises the question.

Why is the blogosphere abuzz lately about Google buying Upstartle, a four-person software company with no revenues? The obvious answer: industry-watchers are sensing another fight coming between Google and Microsoft.

Upstartle makes Writely, a Web-based word processor that's free. Launched in November 2005, the product has gained around 150,000 users. That's just a blip for Google, of course, but the deal is interpreted by some as confirmation that the search-engine leader is trying to knock Microsoft off its software throne -- using so-called "Web 2.0" technologies. These technologies, such as asynchronous JavaScript and XML (together dubbed AJAX), allow Web applications, such as word processors, to perform at speeds comparable to desktop applications.

So how realistic is this idea that Google is targeting Microsoft's productivity applications? In fact, applications like Writely are not a serious threat to Microsoft Office -- which has beaten back numerous challengers, and still controls 95 percent of the market. Writely is designed to be a collaboration tool, rather than a document-creation tool, meaning it's more like Microsoft's free SharePoint Services than Word.

Writely's creators themselves have said they don't see their product competing with Word, but instead complementing it. In fact, they built it using Microsoft's own .NET technology, which lets developers integrate software applications across platforms, rather than using AJAX. Furthermore, Google has never declared that it intends to put together a suite of Web applications to compete with Microsoft Office.

What's more, even if such a Web-based application were targeted for the vast Word-dominated market, many people may not want to host productivity applications online, says Mary Jo Foley, editor of the independent newsletter Microsoft Watch. She notes that Microsoft itself tested Office as a hosted application -- but the results were so poor that it abandoned the effort.

All of these realities deflate talk of an imminent "Google Office." The company itself is referring all inquiries about the Upstartle acquisition to the official Google blog, where Writely team member Jen Mazzon simply wrote that Upstartle was happy to be part of Google. "Everyone told us it was crazy to try and give people a way to access their documents from anywhere -- not to mention share documents instantly, or collaborate online within their browsers," Mazzon says. "But that's exactly what we did." Or, more accurately, is doing, since the product is still in beta. (Right now, in fact, Writely can't be accessed by new users, while its programmers work on moving the application to Google's internal platforms.)