Google Girds for a Brawl

Google(GOOG Quote) has just raised the stakes in its battle with Microsoft(MSFT Quote).

On Thursday, the search giant announced plans to introduce an upgraded version of its online application suite aimed at businesses that would sell for $50 per user account annually.

Google Apps Premier Edition, the name of the suite, will include new features such as additional storage, phone support and better reliability.

The package is a premium version of Google's popular Apps application suite, which includes the Gmail email service, an online calendar, an Internet telephony system, instant messaging and a customizable home page.

Google says more than 100,000 small businesses already use Google Apps. Corporate giants such as Procter & Gamble(PG Quote) and General Electric(GE Quote) are also testing out the new service, Google said in a press release.

The Google Apps Premier Edition will include 10 gigabytes of storage for each user, which Google figures is about 100 times the storage of the average corporate mailbox. The email service included in the suite will be up 99.9% of the time, with Google monitoring and crediting customers if service levels aren't met. The service will also include support for critical issues 24 hours a day.

Google's latest move will heat up an intensifying rivalry with Microsoft. The software behemoth has been eyeing more seriously the ad revenue that makes up virtually all of Google's revenue. Its latest Vista operating system may allow it to let users launch searches and click on ads from their desktops.

Meanwhile, evidence surfaced earlier in the month that Google was beefing up its online suite by developing a clone to Microsoft's popular PowerPoint presentation software.

Shares of Google were up 1.1% to $480.99 in morning trading. Microsoft was adding 0.1% to $29.39.