Google today announced Apps Premier, its subscription package of premium, hosted business applications in direct competition with Microsoft.

For $50 (£26) a year per user, Google Apps Premier Edition will offer business customers a number of web-based applications including email, word processor and spreadsheet. It will compete with Microsoft Office’s desktop-based Word and Excel.

A Microsoft spokesman downplayed the launch, claiming online services such as Google’s are “not alone in altering today’s technology industry. Productivity applications represent a very competitive space in which more than 450 million users around the world have consistently chosen Microsoft.”

The Times (London) reports : “Microsoft’s Business Division, which includes Office, accounted for $3.5 billion of the group’s revenues of $12.5 billion in the latest reported quarter, making it the largest source of sales. However, industry insiders say that Google has been quietly preparing for months to tap Microsoft’s cash-cow. Keen to supplement its lucrative search business, Google has built massive data-storage plants, thought to be years ahead of those so far developed by Microsoft and IBM.”

This “cloud” is now being used to host both software and data, while the internet becomes ever more the operating system.

Tom Austin, of Gartner, the technology analysts, said: “This constitutes a real threat to Microsoft’s business model. Eventually, it will have to switch from limited-use licences to software as a service. That will require a fundamental reengineering.”

Despite investing heavily in Office 2007, which was released earlier this month and which, like its predecessors, is anchored firmly to the PC, Microsoft has earmarked $2 billion to develop its own data centres.

The company added that it is now partnering other businesses “to capitalise on emerging services, such as advertising-based software, subscription or on-demand software”.

Most of the Premier Edition components are already available free. “From today, for the first time, it will charge for “white label” tools that carry its customers’ brands, so that e-mail addresses can be in the name of the client company.”

Google is working with some of the world’s top publishers to do for books what Apple’s iPod has done for music.

Under the Google proposals, buyers will be able to download entire books in a format they could read on screen or even on mobile devices such as a Blackberry.

The move would give a significant boost to the development of ebooks and would have a big impact on both publishers and booksellers.

Jens Redmer, director of Google Book Search in Europe, announced : “We are working on a platform that will let publishers give readers full access to a book online. You may just want to rent a travel guide for the holiday or buy a chapter of a book. Ultimately, it will be the readers who decide how books are read.”

He believes that after many years in the doldrums, ebooks looked poised to go mainstream.

The Sunday Times reports : “Sony recently launched its Reader, a digital book device with an online book store stocking 10,000 titles. Amazon, the world’s largest online bookseller, is also planning to launch an ebook service.”

Evan Schnittman of Oxford University Press — a Google partner — said he foresaw a number of categories becoming popular downloads : “Do you really want to go on holiday carrying four novels and a guide book?”

This will be part of Google’s Book Search service. Its partnership with publishers will make books searchable online with publishers’ approval. Links will then guide buyers to sites where they can buy a physical copy of the book.

Penguin, HarperCollins and Simon & Schuster are among those involved in the project.

The Google Code Jam for Latin America is close to closing its applications list. If you want to take part in this “jam-session” for coders, get your skates on and follow the instructions below :

“There are only 5 days left until registration closes for Google Code Jam Latin America 2007. So far over 4,000 competitors have signed up for a chance to showcase their programming skills and win an all expenses paid trip to Google’s Brazil engineering office, where they will compete for R$75,000 (Brazilian reales) in cash and prizes. The finals will be held on March 1. Latin Americans have registered in large numbers from Brazil, Argentina, Mexico, Peru, Colombia, Chile, Venezuela and Ecuador as well as many other countries.

“The top 50 finalists will be flown to Belo Horizonte to show us what they’ve got. Think you’ve got what it takes to Code Jam? Click here to register!”

Sounds irresistible.

Google has made some improvements to its Blogger.com service — not before time, say some. The Official Google Blog reports :

“Blogger has always been the easiest-to-use blogging software around, but it just got way more powerful. We’ve added a bunch of new features, which you can check out in the new version:

“You can add stuff to your blog (cute cat photos, lists, feeds) without needing to know HTML.

“You can also make a completely unique template that has just the color scheme you want, without knowing any CSS.

* Don’t want your mom to read your thoughts? Make a private blog.
* Label your posts, to group related ones together.
* Use one of our new templates.
* You can now sign in to Blogger using your Google Account.”

They seem to be making some progress on the splog issue too, but it remains a problem still.