In a change from the test product it released in February, Office Live will also include a feature to allow small business owners to buy advertisements, tied to certain keywords, to appear alongside Microsoft's Live Search results.
Microsoft, already dominant on computer desktops with its Windows operating system and Office software suite, has been beefing up its Internet-based services to better compete with rivals such as Google.
By making it easier for small businesses to buy up keywords, Microsoft plans to peck away at Google's lead in the online search advertising market.
The company will offer a free, ad-supported version of Office Live that includes Web hosting, 25 company-branded e-mail accounts a shared calendar and access to Microsoft's advertising platform.
There will two subscription-based versions at $19.95 a month and $39.95 a month. Both versions come with more storage and more e-mail accounts than in the basic offering.