Google Office vs. Microsoft Office: What's the end game?

Google is prepping a PowerPoint-ish presentation tool to finish off what Paul Kedrosky coined an anti-Office suite. The big question is what's the end game here?

I'll leave the code and intricacies of the file conversions to the folks much better equipped. But let's fast forward to the end game, which appears to be Google's plan to eat away at Microsoft's best business. While Microsoft's Vista business is nice, Office--also known as the bulk of the Microsoft Business Division--is better. For the quarter ending Dec. 31, the business division had revenue of $3.5 billion and operating income of $2.17 billion. No other division came close to that performance.

For context, Microsoft's Office business delivered more in revenue and operating income than Google did in the fourth quarter. Google had fourth quarter revenue of $3.21 billion and operating income of $931 million.

Simply put, Google is a fly on the elephant that is Microsoft right now. But all Google has to do is make Microsoft defend the Office business. If Microsoft has to respond to Google Docs--it doesn't yet--the software giant won't be able to focus on search and keyword advertising. Even a company with Microsoft's cash pile has limited resources.

Under that formula, Google doesn't even have to be wildly successful with Google Docs--all it has to do is be a big distraction. Many of Google's initiatives appear only to be designed to distract Microsoft. And encroaching on millions of PowerPointers is one way to get Microsoft's attention. PowerPoint is also the best avenue to gaining adoption for Google Docs. Word processing and spreadsheets are nice, but if you play word association with corporate desk jockeys Office is PowerPoint.

And Microsoft doesn't have much of an answer for Google. It has Office Live, but that effort is more about complementary Web services to go with the shrink-wrapped Office. Microsoft also doesn't have the platform to monetize a Web version of Office and many folks can't define the company's Live brand anyway.

Add it up and Google's presentation tool will be the first real Office advance in a very long war against Microsoft.  While Google's culture gets the headlines, its war gaming is pretty strong too.

In the end traditional Office uses--word processing, spreadsheets etc.--will move online leaving Microsoft's shrink-wrapped Office to become a high-end application. Office 2007 already resembles more of a business intelligence tool than a way to type up memos.

If Office moves upstream that'll leave an even playing field for Google and Microsoft to duke it out for Web-based productivity tools. It'll be a protracted war with lots of strategy.