Google today launched

Google Apps for your Domain
 - a set of hosted services aimed at small and medium businesses.

Just as we were getting used to Google as a new advertising powerhouse with MSN pushed to the fringes, the search behemoth reminds us that it wants an even larger slice of the action, this time carved from more familiar Microsoft territory.

Gmail, Google Talk, Calendar and Page Creator are now all available in one place with plans to add Writely word processor and Spreadsheets to the suite along with online collaboration features, according to a write-up by InformationWeek.

TechCrunch describes this as a ‘bold move’ because it is clear that Team Google has its eye on some of MSFT’s $12 billion annual revenue from Office products and massive 95% market share for productivity software.

According to commentators, Microsoft faces a threat because its collaboration offerings in to the form of its Live software have so far been disappointing.

Google hopes that it can exploit the weaknesses before Microsoft lifts its game.

Dave Girouard, VP and GM, enterprise, at Google, said: ”Organizations of all sizes face a common challenge of helping their users communicate and share information more effectively.”

He added: “A hosted service like Google Apps for Your Domain eliminates many of the expenses and hassles of maintaining a communications infrastructure, which is welcome relief for many small business owners and IT staffers.”

The advantages for hosted solutions are clear to many businesses but it remains to be seen who will win this battle. Microsoft minds are now sure to be even more focussed on ‘raising the bar’ with Office 2007, Office Live and Vista.