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Microsoft Corp. launched a fully online version of its popular Office suite of applications on Tuesday as it looks to extend its customer base and beat back rival Google Inc.

The new service, called Office 365, is available as a limited test from Tuesday, and will be on sale on a subscription basis worldwide next year.

Combining some of Microsoft's existing cloud-based services, it will be available through most browsers and on mobile devices.

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That means customers can get access to Office programs like Outlook e-mail and SharePoint websites without installing software, from virtually anywhere.

The move strikes a blow against rival Google, which has had some success with its Google Apps service, which provides a low-cost, Web-based alternative to Microsoft's traditional Office software.

Shares of Microsoft were down 2.7 per cent at $25.12 in morning trading, while Google fell 1.1 per cent to $610.95.

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