'The Office' creator deepens Microsoft ties

Microsoft office 2007 is hoping the creator of Ugly Betty can make MSN a little more beautiful.

The software maker announced Tuesday that Ben Silverman's Reveille will create two more Internet video shows for its MSN Video site. One, called "Driving School," is being sponsored by Volvo and will feature cast members from The Office. The other, dubbed "This is the Life," is a travel and leisure show being sponsored by Chivas.

Microsoft first announced its deal with Reveille at last year's ad summit. Reveille has so far delivered two programs through MSN: The Big Debate and a Kraft-sponsored cooking show, Chef to the Rescue.

Although it faces competition from Google and OpenOffice--whose offerings are free--Microsoft continues to see strong sales in the unit that includes Office. The Microsoft Office Ultimate 2007 Business Division, largely on the strength of Office, grew its revenue in the most recently reported quarter to $4.8 billion, up from $3.6 billion in the same quarter a year earlier.

Operating income grew to $3.4 billion from $2.4 billion a year earlier.
Capossela did say that it doesn't see a distinction between desktop productivity software and Web-based productivity software.

"We're very happy to be the leading vendor in the space and we want to continue to be the leading vendor in the space," he said. "We look at everything from ad-funded software to Web-based software to servers. Long term the way we differentiate from Google, it's the combination of all three: client, servers and services that is the winning strategy."