MOUNTAINVIEW, California: Hot on the heels of its $1.65 billion (€1.31bn; £883m) acquisition of cult video website YouTube, search giant Google announced it will combine its online word-processing and spreadsheet programs into a single, free offering.

The firm is melding its existing Writely and Google Spreadsheets sites under the Google Docs & Spreadsheets brand in what is undoubtedly a challenge to business software leader Microsoft.

Google, however, is adamant this is not its intention. Product manager Jonathan Rochelle insists the company is not targeting the desktop productivity suite market place.

He adds: "It made sense to combine these products and people were asking for that. It doesn't change our strategy. This is complementary to desktop products."

The service, which will initially be advertising-free, will enable multiple users in different locations to collaborate on documents. All documents will be stored on Google servers, where they can be searched in the same way as email using the company's Gmail service.

Data sourced from BBC Online; additional content by WARC staff