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Google challenges Microsoft in the office

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KAI RYSSDAL: And it’s probably no accident Google chose today to get into the world of business software. This afternoon, the search company announced a product called Google Apps. It hits the market just as Microsoft is peddling the latest version of its office software.

And it’s a change from Google’s regular business model: ads, ads and more ads. They get the company more than 90 percent of its revenue. Ashley Milne-Tyte took a look at whether Bill Gates and company ought to be worried.

ASHLEY MILNE-TYTE: The main advantage over Microsoft is price. Businesses pay $150 a person for Microsoft Office, whereas Google Apps is being offered for just 50 bucks. And you don’t have to be tethered to a particular machine to use it. You access the software over the Internet from any device.

John Battelle is the author of “Search,” a book about Google. He says Google insists search always will be its priority.

JOHN BATTELLE: But it’s very clear to me that with an announcement like this, Google is doing what Wall Street expects of large companies with very large revenue bases. Which is to grow into new markets.

Microsoft, he says, should be very concerned. That’s not to say it’ll necessarily be easy for Google Apps to conquer some companies’ reservations.

BATTELLE: All that information that they’re creating and manipulating and sharing between employees is up online. And therefore there’s a concern that that information may become unavailable due to outages.

Still, he says, this is the way software is going — away from shrink-wrapped packaging and onto the Web.

Porter Bibb of Media Tech Capital Partners says Microsoft has a daunting worldwide network of 450 million users of the Office suite, but . . .

PORTER BIBB: If Google gets 1, 2, 3, 4 percent of that in the first year, they will consider this a raving success. And that would represent a 10 percent increase in the lift of overall annual revenues for Google.

So, he says, let the battle begin.

In New York, I’m Ashley Milne-Tyte for Marketplace.

RYSSDAL: On balance, it just wasn’t a great day for Microsoft. A federal court has awarded Alcatel-Lucent a billion and a half dollars worth of Microsoft’s money in a patent dispute over digital music technology.

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