Is Google prepping an office suite?

Google announced Thursday that it is acquiring Upstartle, maker of Web-based word processor Writely.

The move immediately fueled speculation that the search engine company may be working on its own version of an online office suite, which could compete with Microsoft's cash cow.

Rumors about the supposed suite have been percolating for some time, fueled in part by Google's partnership with Sun Microsystems and reports of a Google calendar program.

Google hasn't yet stated how it would incorporate the word processor, which is still in beta, into its other offerings. But bloggers were happy to speculate on their own.

Blog community response:

"Now buying Writely is in line with Google thinking of using browser for everything. I mean an online word processor, and online excel spread sheet make a lot more sense than making people switch to OpenOffice."
--Om Malik

"So this is how I see it working. Google Desktop is used to synchronise your local drive with your GDrive (with Lighthouse probably being the tool that you use to decide who can access and share what data). If your working on your regular computer, click a document and it opens up into OpenOffice Writer. If your on a public workstation log into GDrive, click on the same document and it opens up in Writely."
--Squash

"Still, Microsoft will likely view this as a much more direct attack -- especially coming so soon after Microsoft's new focus on its 'Live' strategy. Bet you can't wait to see the response."
--Techdirt