Microsoft has announced that it's dumping its Office-lite software, Microsoft Works, in favour of an ad-supported "Office Starter 2010". The idea is that PC makers will install the full version of Office on computers they sell, but that users will be subject to advertising and reduced features until they purchase a license for the software.
Buying that full version will be made easier, too. Instead of selling a big box, retailers will instead carry a plastic card with a license number inside - you can enter the number and your software will be unlocked. Only Word and Excel will be available in the ad-supported version.
This appears to be a "win" for all concerned. Light users get a functional MS Office, without all the functions that heavy users need but which they probably wouldn't use. Microsoft get revenue from those light users - a source of cash that wasn't previously open to them. Retailers get an easier way to sell office, and heavy users get the benefits of more features from the new cash rolling in.
What this means for Office Web Apps, though, remains to be seen - it could harm its development. We'll keep you posted of further info.