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Microsoft hopes to charm small businesses with a new bundle of software and services called Office Live, available for public beta testing starting today. The star of the show is a free, basic Web site for your company--courtesy of Microsoft and some third-party ads that will run on the page. Office Live will also offer monthly subscriptions to a bundle of 20 Web-based "applications," many of which are templates for organizing and sharing information online.

Free Web Hosting

The Office Live Basics Web site offer will appeal to small businesses pressed for time and money, though it's not a new idea. Yahoo has offered free Web pages to small-business owners since spring 2005, for example, although Microsoft's page templates have more eye-appeal.

After you sign up for the Microsoft service (using either your Microsoft Passport or MSN account and the Internet Explorer browser), it's easy to use the service's point-and-click site-design tool, which features many visual examples of page layouts and color schemes. Unfortunately, the templates' basic stock photos are anything but cutting edge or artsy.

Microsoft will supply the domain name of your choosing (assuming it's available). You also get five e-mail accounts at that domain. Basic site management and analysis tools are included. The company insists that the ads it places on your site will be relevant to small-business customers and will not relate to any of the three "D"s--diet, dating, or debt.

Collaboration Bundles

For a monthly fee that is still to be determined, the Office Live Collaboration service will combine some 20 Web-based applications. The subscription will also include access to a password-protected Web site that you can use to share documents with employees and customers. The apps are based on Microsoft's Windows SharePoint Service technology.

However, these are not traditional applications as much as they are organizers for data about your customers, employees, projects, sales campaigns, and the like. When you sign up, Microsoft defines the applications as "customized views of data that are stored as lists." In fact, some of the apps are no fancier than a list of your employees. Others encourage you to track available sales opportunities, news clippings, and key information about your rivals, among other business-related tasks.

The application interfaces are clean: The average small-business owner will be able to move through the templates with ease. You and your employees can access the apps and your data from anywhere with a Web connection.

Microsoft promises daily backups on its servers. Unfortunately, the only way to back up the data to your local PC is to export it to Excel or Outlook, a feature we have been unable to test yet.

Small-Biz Web Essentials

Small businesses looking for a soup-to-nuts Web solution are the target for Office Live Essentials, which offers a Web site (with domain name and up to 50MB of storage), as many as 50 e-mail accounts using that domain (each with up to 2GB of file storage), and access to the Web-design tools in Microsoft's FrontPage package.

Our take? For small businesses that have not invested much time in organizing business data, the Office Live Collaboration templates ask the right questions and could help put their crucial information in order. But if you're already using full-strength contact- and project-management programs, the current sampling of apps in this service aren't likely to tempt you to switch.

Microsoft hopes to deliver more apps over time, though there's no word on how many will be included when the service launches later this year. The company also hopes third-party software developers will offer specialty apps, such as a billing program for dental offices, for example.

Office Live is part of a broad effort by Microsoft to compete with Google, Yahoo, and other big names that offer similar Web-based apps. It's also seen as a way for the company to develop new advertising and subscription revenues. Microsoft will unveil several other Live products this year, all with Web components.