Microsoft is preparing an update to the Microsoft Works productivity suite amid renewed speculation that the long-standing, low-end counterpart to Microsoft Office is also being groomed to take on Google Docs and Spreadsheets.

Aimed at students and other customers unwilling to shell out for Microsoft Office, Works includes a word processor and spreadsheet along with several other applications. It lacks many of the advanced features in Office and uses different file formats than the .doc or .xls used by Word and Excel.

That doesn't change in the new Works 9.0, though users will be able to natively open and save in the new Office 2007 formats. Works also sports a redesigned central task launcher based around popular document templates, as well as live links with Microsoft's MSN web portal.

Multiple resellers outside the UK worldwide list Works 9.0 as going on sale today - just in time for the key back-the-school season. It has a street price of about $40 (£20) in the US). Works 9.0 is already bouncing around on peer-to-peer networks such as BitTorrent.

One OEM version of Works 9.0 seen by PC Advisor’s sister title Computerworld US easily installed itself without the need for a product activation key. It did not display any web advertising.

With the rise in interest in cheaper or more streamlined alternatives to Office and Works such as or Google Docs, there has long been speculation that Microsoft plans to overhaul Works and offer it as a free, ad-supported software - either still installed on PCs or as a service via the web.

ZDNet's Mary Jo Foley reported Monday that Microsoft is releasing a free, ad-supported version of Works, citing an interview last week with Microsoft's new head of search and advertising, Satya Nadella. That follows a BusinessWeek story last September in which another Microsoft executive said the company is planning to offer free and subscription versions of Works hosted on its Office Live Web sites.

Through a spokeswoman, Microsoft declined to comment. On the webcast aimed at Microsoft partners, Matt did not mention any Web-hosted or ad-supported versions of Works, which was first released for DOS in 1988.

See also:

Google Docs review

Microsoft Works Suite 2006 review