Google the eternal competitor of Microsoft is challenging it in its home bastion, that is, in highly profitable Office software. The search behemothic, using the route of acquisitions and in-house development, is about to lay hands on technology to confront Office’s preeminence with its own class of applications that run over the internet.

Google told Guardian Unlimited that 1,000 businesses and organsiations have commenced using its bouquet of web based tools daily and the company has incorporated presentation software to its existing spreadsheet and word processing modules. Applications will require presentation software before Google can take the fight hands on with Office’s popular and huge three applications –Word, Excel and PowerPoint.

Such a move will impact the bottom line of Microsoft if ample businesses depart from Office. Microsoft’s business division comprising of Office commanding a huge share and enterprise software business is immensely profitable and thereby is alluring to competitors.

The new release of Office 2007 augemunted profits in last quarter and the business division made a profit of $3.4bn (£1.7bn) on sales of $4.8bn. The profit increased by $1bn and sales by 34% in comparison to corresponding quarter last year.

To take the fight heads on, Google in June bridged the gap in Google Applications by acquiring Zenetr, a small company that is in the business of creating software for drawing online slide shows akin to PowerPoint presentations. Besides Zenetr, Google brought Tonic systems, also a presentation drawing service in April.

In theory the move endows Google with functionality it requires for posing a serious threat to PowerPoint. Zenter comes equipped with features like a huge library of web-based fonts along with vector art. Zenter is a front end application, centering on presentation and sharing features while Tonic services back-end and can convert PowerPoint files into Java documents. Google has not announced any date by which its presentation module will be ready. According to Rajen Sheth, a product manager at Google, presentation collaboration is like a puzzle, some pieces of which are being build form scratch and some are coming from outside. According to him, Zenter’s technology is compatible with Google existing Docs & Spreadsheets as it is added to presentation sharing capabilities but there are no categorical plans.

The Applications package is inclusive of Google Docs & Spreadsheets, Gmail web mail services, Google Calendar for shared calendaring and Google talk, which provides instant messaging and voice-over-IP. It also has start Page feature for drawing customizable home page from which users can utilize various tools. Microsoft now commands 95% market share in productivity software as per the data complied by market researcher NPD. Apple has 2.7% share and Corel with its Word Perfect Office software – the alternative to Microsoft Office, has a mere 1.6% market share.

These figures are reflecting of overall dominance of Microsoft and how difficult it is to dislodge it from its pole position. According to Greenbaum, principal of Enterprise Application Consulting, Google has huge work to do as Office is so much integrated into enterprises that its utility lies beyond basic use of word Excel and PowerPoint. In reply Mr.Sheth views that Google’s main area is helping user to organize their information and picking right tool for the job. For collaboration the tool will be Goggle application and for other cases the application can be different. Main thing is user choice. To this Mr. Greenbaum replied that Google Apps is a collaborative tool only among Google users and millions of Office users won’t be interested. He further adds that due to issue of compatibility and interoperability those wanting a collaborative environment will choose Microsoft over Google.

Some experts have pointed out that work needs to be done to achieve seamless integration between different elements of Goggle’s application package.

However, underscoring these challenges, the list of companies evaluating Apps is inclusive of some famous names like Procter & Gamble’s Global Business Services, General Electric, publisher Mondadori, and beauty products company L’Oreal.