It's not often that you get something for nothing, especially when it's from a software giant like Microsoft. But that's exactly what's on offer if you sign up for the company's new online service, Office Live. With no catches, at least as far as we can tell so far.

Don't be misled by the name: sign up for an Office Live subscription and you won't get online access to Word, Excel or any other member of the popular Office productivity suite. What you will get, however, is an online presence, starting with a hosted domain of your own choice together with virtual Web and e-mail servers. All of which come free in the Office Live Basics subscription, including registration and hosting of your .co.uk or .com domain (existing domains can be transferred in) plus 25 e-mail accounts and 500MB of Web space.

An easy to use Web design tool is also included while, for £11.99 (plus VAT) per user per month, you can upgrade to Office Live Essentials which doubles the amount of Web space to 1GB and gives you 50 e-mail accounts. Moreover, each mailbox can hold up to 2GB, plus you get up to 15GB of bandwidth per month, making the Essentials service of interest to small companies as well as individuals looking for a hosted Web/e-mail solution.

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Support for mobile e-mail using Windows-powered handhelds is also included in the Essentials subscription along with a hosted implementation of Microsoft's Business Contact Manager. Access to SharePoint workspaces is yet another plus, along with the ability to use third-party development tools to design and update your Web site rather than those provided by Microsoft. Existing sites can also be uploaded.

Finally, take out an Office Live Premium subscription (£22.99 plus VAT per user per month) and the amount of Web space rises to 2GB, along with extra shared workspace and bandwidth plus additional business applications to help manage customers, employees, projects, and business data.

By default everything is accessed through a browser, which has to be Internet Explorer at present, through which you manage your e-mail, contacts and a calendar as well as the tools provided to create and administer your Web space. Close integration with Outlook and other Office tools is also available as an option if preferred.

Of course it can take a while to learn how the various options work, but it's not that difficult and anyone used to Windows applications ought to be able to master the online tools without too much trouble.

Which is exactly what we did. We found all three implementations very easy to use and reasonably quick, although you do need a fast broadband connection for the best results, plus you quickly become dependent on that connection to do business.

However, everything is backed up for you and it's also worth noting that ownership of your chosen domain stays with you, even if you decide to end your subscription. Plus there's online and e-mail support for all three offerings and telephone support when you opt for the Premium package.

Office Live is a good way for individuals and small businesses to get their own online presence complete with Web and e-mail domains hosted on Microsoft servers. The free Office Live Basics service includes easy to use Web design and management tools with chargeable services also on offer if you want extra capacity and additional business management tools.