STEVE INSKEEP, host:
Now lets move on to Microsoft, which began selling a new version of its Office software yesterday. The new product reflects technology trends and growing competition from Google.
NPR's Wendy Kaufman reports.
WENDY KAUFMAN: Increasingly, consumers are using free online products to replace things like Microsoft Word, Excel and PowerPoint. Google Docs is one example. Given the threat, Microsoft is doing something that would've been unthinkable just a few years ago, giving away free online versions of its products.
The companys Office software has been key to Microsoft's financial success. But company CEO Steve Ballmer says, it now makes sense to give some of it away.
Mr. STEVE BALLMER (CEO, Microsoft): Its not clear to me that this will do anything to reduce the total size of the business opportunity available to the company.
KAUFMAN: The online versions are pared down. And analyst J.P. Gownder of Forrester Research says they should be viewed as a compliment to the full-fledged product you'll have to buy.
Mr. J.P. GOWNDER (Analyst, Forrester Research): They still want people to buy their product, but they want to give away a service that allows people to get the most out of that core product.
KAUFMAN: Despite some critics, Office 2010 has generally been well received. Some of the features the company touts include new tools for photos and videos, seamless integration with social networking sites and more efficient ways of sifting and sorting email.
Right now, most people use Office. But as consumers move from their desktop to the Web for creating and sharing documents Microsoft, will have to keep up and innovate quickly - something it has not done in the past. Still, Microsoft's Ballmer is looking to the future.
Mr. BALLMER: I am optimistic that the world is a better place than it was 18 months ago. Look, we're doing a lot of great work and we got a lot of great competition, and that's what keeps me kind of fired up.
KAUFMAN: And fired up is what the company will have to be.
Last month, Apple surpassed Microsoft as the number one technology company as valued by the stock market.
Wendy Kaufman, NPR News, Seattle.
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