Microsoft this week unveiled a partner program for its Office Live hosted service for small businesses, a product Microsoft chief operating officer Kevin Turner predicted will one day be nearly as important to the company as its Windows client OS.

Through the program, Microsoft partners get an Office Live software development kit and various training opportunities so that they can build new services that will be available to subscribers on the Office Live Marketplace, said Marja Koopmans, director of partner strategy for Office Live at Microsoft. The company unveiled the program at its Worldwide Partner Conference in Denver.

Microsoft currently has about 50 third-party products listed on the marketplace, Koopmans said. Currently, an Office Live subscriber has to have purchased one of two subscription-based Office Live offerings to buy an application on the marketplace. However, beginning in January, subscribers to the free version of Office Live also can purchase third-party offerings from the marketplace, Koopmans said.

Partners also gain access through online forums to Microsoft Office Live engineers for assistance with building new offerings, Koopmans said. In addition to earning revenue by selling new applications, partners can offer consulting services to build Office Live-based Web sites for small businesses, she added.

Beginning in January 2008, Microsoft plans to launch an affiliate program for Office Live that will give them revenue-sharing opportunities with Microsoft, Koopmans said. If partners that sell Office Live-based applications on the marketplace refer a customer to purchase an Office Live subscription, Microsoft will share a percentage of whatever the company earns from that customer with the partner. The company will disclose the specific percentage as the program is closer to launching, she added.

Microsoft unveiled Office Live in November 2005, and the company is grooming the product -- which gives small businesses tools for building a Web site as well as Web-based e-mail, instant messaging, collaboration, and customer relationship management -- to be one of its top sellers. In his keynote at the partner conference Tuesday, Turner said that the hosted service will eventually become one of Microsoft's most popular products alongside longtime top revenue-earners such as the Windows client OS and the Office desktop productivity suite.

"We do believe it will reach our top three or four largest deployed applications we have around the world," he said.

That's a tall order, but at least one partner who is offering an application for small legal firms on the Office Live Marketplace said he thinks Turner's prediction will come true.

"The numbers add up and the demand is there," said Joe McDermott, managing director for Solution Canvas in Glasgow, Scotland. He said it's been traditionally difficult for small businesses to find IT products tailored to them, and Office Live meets many of their needs.

More importantly, he added, broadband is now ubiquitous, and more people accept and use online services, such as banking, every day. Small businesses are more comfortable going straight to the Web for an IT infrastructure rather than buying and installing products onsite themselves.

To improve Office Live, Microsoft in the next two months will enhance the service with more options for subscribers to buy ad words on search engines other than Microsoft's Windows Live Search. Currently, subscribers can use the service's AdManager user interface to buy ad words through AdCenter, Microsoft's paid search platform. Microsoft will extend that ability to other search engines, though it is not ready to disclose which ones yet, Koopmans said.

In the same time frame, the company will add the ability to build e-commerce sites in Office Live's tool for building Web sites, she added.