Mountain View (CA) - Expanding its competition against Microsoft's market leading Office suite, Google today announced that it is going to offer a premium package of online software apps for an annual fee.

According to Googe, more than 100,000 small businesses are actively using the free version of Google Apps, which includes a word processor, spreadsheets, and a calendar.

Google Apps Premier Edition, which will be available to consumers at an annual subscription price of $50, includes increased support and more e-mail storage. In addition to access to 24/7 technical support, premier subscribers will have their Gmail capacity upped to 10 GB, nearly five times what it offers to non-paying users.

The other main feature of the premier version is that is allows companies to use application programming interfaces (APIs) to integrate Google Apps and Gmail with existing infrastructures.

The free version is still available and will likely be the main attraction to general consumers. However, business customers may take a second look away from Office 2007, the business version of which carries a $449 retail price ($279 for upgraders).

Google said it is not trying to compete with Microsoft, however. The general manager of Google's business software division, Dave Girouard, told the Associated Press, "We are not in this to get Microsoft. We are in this to offer more compelling choices for consumers and businesses."

Microsoft admitted Google was continuing to give it a run for its money. Talking about the search engine's Office clone, Microsoft Office director Kirk Gregersen recently remarked, "It helps keep us on our toes."