Microsoft released the public beta of its Office Live, which is interesting both for what it is – and for what it is not.

The name Office Live sounds like it should be the online versions of Word, Excel, PowerPoint and the like. Who knows? – that might happen someday, but it doesn't seem to be on Microsoft's radar right now. In the meantime, other companies are trying to do just that .

Instead, Microsoft is using the Office name to generically include all of its business productivity applications. Office Live is instead a set of services aimed at small businesses, giving them a simple, editable web site; e-mail services; domain hosting; and similar features.

The easiest level -- Office Live Basics, is a free service, and includes 30 MB of storage for a web site and 5 email accounts. Next up is Office Live Collaboration, which is primarily a place for organizations to collaborate – it gives you a 50 MB workspace and basic applications for sharing information, including some nice templated applications for managing customers, employees, projects, etc.

Then there's Office Live Essentials which includes both the collaboration space and applications; and the web hosting and e-mail features, giving you up to 50 e-mail accounts. Microsoft has said Basics will stay free, while Essentials or Collaboration will cost $29.95/month yet, but they are free during beta.

I've tried out the Essentials service, and built a tiny web site with it; it's a pretty good service for a very small business who wants a small web site and e-mail. I found it pretty solid, though with a few "beta bugs" which are to be expected at this stage. One thing I really liked was the dashboard, where you can collect your projects, customers, and calendar, and link it all to Outlook. And it's nice that it has workspaces already set up for your vendors and for HR. etc.

Microsoft is certainly not going to be alone in this space. Companies like Intuit already offer a number of features aimed at small businesses, though typically with a focus on accounting. I'm impressed by the concept behind Hyperoffice , which offers what it calls a hosted intranet solution with collaboration, web-based e-mail, contact management, calendaring and more. It offers more storage space, though it can get more expensive as you add more users. And, at least on the simple end, I expect Google will compete as well. Already, Google is currently doing a private beta of a service that will host e-mail accounts featuring a user's domain name instead of gmail.com. 

But Microsoft's service for now does a whole lot of things for a small business, and for a very small business (one that just needs a couple of mail accounts and a small web site), it does it for free.  And that will be compelling.

If all this means more attention on small businesses, that can only be a good thing.