Google is escalating its rivalry with Microsoft with the purchase of Quickoffice, the maker of a widely used mobile application for working on documents created in Microsoft's programs for word processing, spreadsheets and presentations.
The deal, announced on Tuesday, gives Google Inc a new weapon to foil Microsoft Corp as more people get work done on smartphones and tablet computers. Quickoffice makes those devices compatible with Microsoft Office even if the software suite isn't installed on them.
Although it makes virtually all of its money from online advertising, Google already has spent several years trying to siphon sales away from Microsoft by offering its own suite of Office-like programs that are accessible over the Internet.
Some of these applications, called Google Docs, are given away for free, while more sophisticated versions, called Google Apps, are sold in subscription packages costing $50 annually per user.
Forrester Research analyst Ted Schadler said Google's online applications don't interact well with Microsoft Office files on mobile devices, a shortcoming that Quickoffice presumably will address. Schadler expects Google to add features to the Quickoffice app so it can sync with work done through Google Apps on office and home computers.
Without providing details, Google said in a blog post that it intends to incorporate Quickoffice in its paid Apps suite. Microsoft, meanwhile, dismissed Google's challenge.
"Google Apps require compromise and don't meet the productivity needs of most people and businesses," said Clint Patterson, director of communication for Microsoft's Office division. "Google's primary focus is advertising so it's not surprising that they are trying to address the limitations of Google Apps through acquisition."
Some of the technology used in Google Apps also was imported from previous Google acquisitions.
More than 400 million devices are currently equipped with the Quickoffice app, which costs $15 to $20. It works on several types of devices, including Apple Inc's iPhone and iPad and those running Google's Android software. Quickoffice charges additional fees for users who need more editing and sharing tools.
Financial terms of the acquisition weren't disclosed. It's the second deal Google announced this week, extending a shopping spree that has seen the Internet search leader buy more than 140 companies for more than $16 billion during the past two-and-half years.
On Monday, Google disclosed that it's buying Silicon Valley startup Meebo to help expand its Plus service for social networking.
Microsoft has been widely rumored to be building an Office app designed for the iPad, by far the top-selling tablet computer with more than 67 million of the devices sold during its first two years of the market. If that happens, Google would be able to offer a rival product that conceivably could be sold at a lower price.
Microsoft so far has brushed off the rumours of a forthcoming Office app for the iPad as unfounded speculation.
Even if Microsoft doesn't release an Office app for iPads, the software suite is expected to be included on upcoming tablet computers powered by Windows 8. That makeover of Microsoft's computer operating system is expected to go on sale in September or October.
By expanding the tablet distribution of Quickoffice, Google could give consumers and businesses one fewer reason to buy a product running on Microsoft's operating system.
Quickoffice, which is based in Plano, Texas, employs about 400 people. It's run by Alan Masarek, who co-founded the company a decade ago.
Google, which is based in California, ended March with more than 33,000 employees. The company picked up another 20,000 workers last month when it completed a $12.5 billion acquisition of cellphone maker Motorola Mobility.