Microsoft Previews New Windows Live and Office Live Services interesting read They are going after advertisers too then. Will there be space for other publishers? I doubt it.
I think we will see more and more web based applications in 2006. There are already "online" versions on word and excel (non-MS), and these sorts of things will continue to improve. It won't be long before you can perform most office type activities (word processor, spreadsheets) using only your browser. Microsoft has no choice but to prepare for this coming "office killer" (which could come from google or elsewhere).