MOUNTAIN VIEW, Calif. TheStreet -- Google ( GOOG) has opened up another front in its war with Microsoft ( MSFT) by launching a new online store for business applications.

In a company blog post, the Internet giant explained that the Google Apps Marketplace lets users find, deploy and manage cloud-based business applications. More than 50 companies are already using the Marketplace so sell applications, including small business software specialist Intuit ( INTU).

Once installed to a company's domain, the apps will work like native Google applications. The programs can also interact with Google's Gmail, calendar and document offerings, Google said.

Clearly Google's new online store aims to increase the pressure on rival Microsoft.

Google and Microsoft are increasingly stepping on each other's toes in an attempt to open up new revenue streams. Microsoft has been charging hard with its Bing search engine, while Google's Chrome OS is a direct challenge to Microsoft's dominance in the PC market.

Like much of the tech sector, Google is hell-bent on boosting its cloud-computing story. Cloud services, which offer specialized applications, compute power and storage via the Internet, are said to be the next big thing.

Rival Microsoft also has its head firmly in the cloud. Earlier this year the software maker announced a $250 million cloud partnership with Hewlett-Packard ( HPQ), and is also keen to speed up the development of cloud applications.

More recently, Microsoft began charging for its Azure offering, which is aimed at developers that want to create cloud-based applications. Microsoft is also planning to launch a second cloud initiative, dubbed Natal, later this year.

The challenge for Microsoft, though, is how to boost its cloud story without it eating into the rest of its business. Cloud services comprise much lower margins than Microsoft's traditional software sales.

Google may not face the same margin dilemma as Microsoft, although it does face fierce competition from the likes of ( CRM), which has racked up more than 72,000 customers for its cloud-based solutions.

Apple's ( AAPL) App store has already harnessed the phenomenal demand for consumer applications, something that Google and Microsoft would love to emulate for business users.

Investors should expect to see some Microsoft/Google clashes along the way.

Google's recent acquisition of startup DocVerse is seen as paving the way for users of Microsoft products like Word, Excel and PowerPoint to transition to Google Apps.

Shares of Google rose $10.83, or 1.93%, to $571.02 in Tuesday trading, outpacing the broader advance in tech stocks that saw the Nasdaq gain 0.87%. Microsoft's stock climbed 15 cents, or 0.52%, to $28.95.

-- Reported by James Rogers in New York


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