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With Online Spreadsheet, Google Enters Yet Another Microsoft Market - 06 Jun 2006

It's suddenly clear why Microsoft is so nervous about online search giant Google. Despite Google's protests that it has no interest in competing in Microsoft's key markets, Google has been busy releasing products and services the past few years that do exactly that. The latest example, Google Spreadsheets, was announced today and represents Google's second major foray into office productivity software.

Granted, the initial version of Google Spreadsheets isn't going to challenge Microsoft Excel's domination any time soon. It can't even make charts or graphs yet. But the bare-bones Google Spreadsheets package does do a few things that Excel doesn't, and it's only a matter of time before it comes with some of Excel's more widely used and desktop-oriented features.

Once again, Google is downplaying what is clearly a heated rivalry. "I see them as complementary," Jonathan Rochelle, the product manager for Google Spreadsheets told "The Wall Street Journal," referring to Google Spreadsheets and Excel. "I know a lot of users will use both." What an interesting way to characterize the situation. Currently, the majority of Excel users use Excel for spreadsheet functionality, and nothing else.

Google says that Google Spreadsheets is notable because it allows multiple users to easily work on a shared spreadsheet online, in real time, through integration with Google's GTalk IM service. "Many people already organize information into spreadsheets," Rochelle notes. "Where they're struggling is to share it." To maximize compatibility, Google Spreadsheets works with spreadsheets created in Excel and in its own format.

Predictably, Microsoft expresses no outward concern about the Google service, but you have to believe that the company's engineers are working overtime to assess the threat. "There's nothing new here \[with Google Spreadsheets\] really," Microsoft General Manager Alan Yates said. "It's like watching a time machine from ten years ago."

If there's nothing new here, then why even discuss the product? Because Google Spreadsheets, like all Google products and services, is a work in progress. As always, Google has placed an early, unfinished version of the service on the Web for users to try--although it's currently available only to a limited test group. Google will add features and functionality over time. If it's successful, Google Spreadsheets will turn into a true Excel competitor. And if not, it will simply wither in cyberspace, its fate the same as that of other failed Google initiatives.

In addition to Google Spreadsheets, Google recently launched or purchased office productivity products and services, including online word processor, email, IM, calendar, desktop search, and Web page and blog creation tools. Virtually all of these products and services are still fairly rudimentary compared to the well-polished desktop-oriented tools that Microsoft creates, but because Google's offerings are made available online and for free, they can be updated quickly and regularly. Microsoft has only sporadically offered those types of tools to the public online and for free in the past, primarily through its MSN unit. Not coincidentally, those offerings were pulled into the Windows Division last year and are now being rolled out as Windows Live services.

So is Microsoft justified in its fear of Google? Most likely, yes. Google is flush with cash and, despite its public pronouncements, seems to have little problem jumping into major Microsoft markets. And let's face it, in recent years Microsoft hasn't exactly been the bully it used to be because of its ongoing antitrust concerns. When Adobe threatened to sue the company over its support of PDF--a technology that Adobe licenses to numerous other companies for free--Microsoft simply caved, removing both PDF and its own competitive format, XML Paper Specification (XPS) from Windows Vista and Office 2007.

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