The web versions of Microsoft software are due to debut in 2009
Microsoft is preparing web versions of some of its most popular programs.
In 2009 web versions of Word, Excel and other programs in the Microsoft Office suite plus Exchange and Sharepoint will go online.
Users will be able to get at the programs via a web browser rather than install them on a PC.
Some versions of the programs are expected to be free to use provided users are happy to view adverts alongside the software.
"We expect fully that the full range of Office utilities, from the most advanced to simpler lightweight versions, will be available with a range of options: ad-funded, subscriptions-based, traditional licensing fees, and so forth," Stephen Elop, head of Microsoft's business division told the Reuters newswire.
The decision by Microsoft marks a significant change by the software giant which, before now, has only dabbled in web-based versions of its programs.
It has offered an ad-supported version of its Works suite that is available pre-loaded on some new PCs.
By contrast many others, such as Google and Adobe, have been pushing web-based versions of word processors and other programs for some time.
The move to web-based versions is also seen as a belated move by Microsoft to bolster its credentials in the move to so-called "cloud computing" in which applications only live online.
Microsoft pledged that the web-based versions would also work with rival browsers, such as Firefox, and would not require users to install its Silverlight software.
So far no date has been given for when the web-based versions will be available - though they are expected to be put online in 2009.
Mr Elop said Microsoft had seen strong interest from many existing customers in the web versions. Using such software would free many from maintaining their own hardware and software to support locally-installed versions.
The economic downturn and need to cut costs could boost the attractiveness of web-based software, said Mr Elop.
"What we think is in five years, 50% of the use of Exchange and Sharepoint could be serviced from the cloud," he said.