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If you're looking to establish a business presence online, Microsoft's improved Office Live Small Business offers a fast and easy way to get started. Office Live concentrates on helping a small business find new online customers and sell more to its existing ones.

A few services are free, including enough storage (500MB) to host a decent-size Web site. But the cost of the many extras can quickly add up. You'll need to pull out your calculator to determine if Office Live is a good value for your business.

New Pricing

Previously, Office Live came in three editions, each featuring a different bundle of subscription services. Now it's a single base package, called Office Live Small Business, with a number of optional add-ons that are for pay.

The free, ad-supported Office Live core service includes the aforementioned Web hosting with 500MB of storage, site design tools, e-mail (up to 100 accounts with 5GB of storage each), a subdomain (say, 'repairs.yourcompany.com' if your business does repairs as well as sales), and 50MB of storage for business documents, contact lists, and other files that up to five users can share. The ads that pay for the service appear to you and to others who access the business account, but not to the public visiting your Web site.

You can add many other services, such as a custom domain (free for the first year, then $15 per year), extra Web-site and business storage ($5 per month and up), ad-free e-mail ($20 per year), support for more (beyond the first five) business-application users (ten users for $15 per month), and an E-commerce-store app that can list products on both your own site and eBay ($40 per month). An e-mail list service in free beta test lets you send up to 200 messages, such as electronic newsletters, to your customers. You can also sign up for AdManager, a pay-per-click (PPC) search engine advertising service, to help promote your site.

Most businesses will likely prefer this menu-based pricing to the former subscription bundles, since you pay only for those options that you believe offer value to your organization.

Among the base services, the most improved is Web-site design. Most small businesses will use the standard design templates to create a site quickly and easily. The service also offers advanced design options such as CSS (Cascading Style Sheets) and page layout, but those tools are probably too complicated for the average nontechie. Consider contacting a professional Web designer if you desire a more elaborate, custom site look.

Share Info With Others

It's easy to share contacts--customers and prospects--with colleagues you add as users to your Office Live service. You can enter the contact details directly online or synchronize them with Outlook contacts and e-mail already on your PC.

Similarly, you can share important documents, such as customer contracts, with other Office Live users by uploading the files from your PC, and you can add other shared apps, available at extra cost from third-party vendors at the Office Live Marketplace.

If your business sells products, the new Store Manager, which offers a shopping cart, could be the most valuable of the new services. But its setup, while easy, can be time-consuming if you offer many products.

Besides the $40 monthly fee for Store Manager, you'll also incur PayPal charges for accepting electronic payments, including major credit cards. You face no extra charges if you accept payment by check, money order, or cash, but those forms of payment aren't as convenient for online shoppers and will require extra work for your business to track. eBay fees also apply if you list your products on that auction site.

Is It Right for Your Business?

The appropriateness of Office Live for your business depends on your size, and on your mix of online and offline sales. You can purchase the equivalent of most Office Live services from almost any good Web hosting service for businesses. The key exception is AdManager, which delivers one-stop shopping for search engine advertising.

While AdManager sounds great, it places pay-per-click (PPC) advertising only on a few, relatively minor search engines, including those run by Microsoft and Ask. Those engines account for less than 15 percent of U.S. search queries (according to the Web research firm comScore). The leading PPC ad service, Google AdWords, reaches roughly four times as many U.S. search engine queries as AdManager.

Office Live certainly delivers a valuable bundle of freebies that can help a small business--even a new one with little cash to spare--establish its first Web site. The extras can become expensive, though. Compare the total cost of those you require with the cost of similar services from a high-quality business Web host to determine if Office Live will be cost-effective for you.

Office Live Small Business is currently available in the United States and the United Kingdom, and is now in beta-testing in France, Germany, and Japan.

For more information on hosted services and online applications designed for small businesses, visit the 'Software and Services' area.