Joe Wilcox of Jupiter Research has a blog post entitled Google My Spreadsheet where he talks about Google's recently announced Web-based spreadsheet application. He writes

So, Google is doing a spreadsheet. On the Web. With collaboration. And presumably--if and when released--Google Spreadsheet will be available for free. I predict there will be crisis meetings at Microsoft today. I totally agree with Colleague David Card that "Google is just playing with Microsoft's (hive) mind. Scaring the troops. Sleight-of-handing the managers."

Perhaps the real Google competitive threat isn't any product or products, but the information vendor's ability to rustle Microsoft corporate paranoia. To get Microsoft chasing Google phantoms, and in the process get Microsoft's corporate mind off its core business. News media will be gaga with Google competing with Microsoft stories--two juggernauts set to collide. Yeah, right. I'd be shocked if Google ever released a Web browser, operating system or desktop productivity suite. Those markets aren't core to Google's business, contrary to speculation among news sites and bloggers.

As for the spreadsheet, which isn't really available beyond select testers, what's it really going to do? David is right, "Consumers don't use spreadsheets. No thinking IT manager would sign off on replacing Excel with a Web-based spreadsheet." Google's target market, if there really is one, appears to be casual consumer and small business users of spreadsheets--people making lists. OK, that competes with Microsoft how? So soccer mom or jill high schooler can work together with other people from the same based Web-based spreadsheet. Microsoft shouldn't really sweat that, although Microsoft might want to worry about what Google might do with extending search's utility.

I agree 100% with Joe Wilcox's analysis here. This seems more like a move by Google to punk Microsoft into diverting focus from core efforts than a product category that is well thought out. I thought at the recent Google Press Day, Eric Schmidt mentioned that they have not been doing a good job of following the 70/20/10 principle (70 percent focus on core business, 20 percent on related businesses and 10 percent on new businesses).

If I was a Google investor, I'd be worried about the fact that their search engine relevance is detoriorating (Google Search for "msdn system.string" doesn't find this page in the top 10 results) and they are wasting resources fragmenting their focus in so many myriad ways. As a competitor, it makes me smile. ;) 

Update: From the Google blog post entitled It's nice to share it looks like this is an offerings from the creators of XL2Web who were acquired by Google a year ago. Another example of innovation by acquisition by Google? Interesting.