When Microsoft debuted its Office Live Small Business service over two years ago (see my preview), the company was in the nascent stages of delivering its LIVE offerings. Then simply called "Office Live," the service has since been renamed to Office Live Small Business, both to open the door for other Office Live services (like Office Live Workspace, see my review) and to make the name a bit more self-explanatory. This past week, however, Microsoft issued its first major upgrade to Office Live Small Business and the result is a service that should appeal quite a bit to those businesses without dedicated technical staff.

The biggest change goes right to the heart of the biggest issue facing small businesses: Their pocketbook. Whereas the original version of Office Live Small Business offered three levels of service with varying features and price points, Microsoft has now split out various premium services, allowing customers to subscribe to them on an a al carte basis. The result should be a far more affordable service for most businesses

Microsoft also opened up Office Live Small Business to users of the Firefox Web browser, where the previous versions supported only Internet Explorer (IE). This may seem like a small change, given Firefox's approximate 10 percent market share in the US. But this move opens up the service to new range of small businesses, including those who use Macs. And it makes the service much more appealing outside of the US, where Firefox's market share is often quite a bit higher. That sort of pragmatism is something Microsoft rarely gets credit for, but it permeates Office Live Small Business.

The basic Office Live Small Business account is absolutely free. At this level, you receive up to 100 email addresses and a custom Web site, both tied to a custom domain name, 500 MB of online storage space, a surprisingly good Web-based WYSIWYG Web site editor, integration with Microsoft Outlook, and collaboration facilities via Office Live Workspace. Not too shabby for a free product, which is ad supported but not annoyingly so.

The extra-cost a la carte offerings range from extremely useful to surprisingly limited. On the useful end, Microsoft offers a full featured shopping cart Web application that lets you sell merchandise from your own Web site and/or on eBay. This tool, called Store Manager, allows you to accept credit card payments, access real time sales reports, and is generally pretty affordable: $39.95 a month plus a 1 percent monthly transaction fee. There's also a useful email marketing tool, currently still in beta, that lets you target customers through email mailing lists in a variety of ways.

Less useful is the search marketing tool, which helps you target potential customers online via search ads. Unfortunately, however, Office Live Small Business currently only supports second-tier search engines like MSN/Live Search and Ask.com. The two biggest and most lucrative search engines, Google and Yahoo, are not supported. I'm told they're looking into adding support for these search engines, however.

I'm still investigating the various nooks and crannies of this significantly improved service, and I'll have a longer write-up available soon. Stay tuned.

An edited version of this article originally appeared in the February 19, 2008 issue of Windows IT Pro UPDATE. --Paul