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Google sparked another battle with Microsoft yesterday by agreeing to buy a small company that offers a rival product to Microsoft’s Word software.The American online search engine is buying Upstartle, the Silicon Valley-based company behind Writely.com, an internet-based word processor. The move is Google’s latest expansion away from its core search product and marks the company’s increasing interest in a market long-dominated by its Seattle-based rival.

Writely, which was founded in 2004, allows users to create documents using an internet browser. The documents can be saved on Writely’s servers in formats including Microsoft’s Word and Adobe’s PDF. Users can also share documents over the internet so that nominated third parties can access or edit documents remotely.Google’s backing could help to make the site a credible alternative to Microsoft’s Word, which forms part of the software giant’s Office package. The package also includes the Excel spreadsheet and Access database software.

Writely is free to use but Google has held out the possibility of introducing additional features for a fee. It could also license the software to businesses.

Last year Google and Sun Microsystems made a joint marketing agreement to guide Google users to OpenOffice, a free equivalent to Microsoft’s Office that is backed by Sun.

Microsoft’s products offer more back-up support than these free alternatives. However, some analysts believe that free office software could hit demand for Microsoft’s products, particularly among occasional users.

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