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Microsoft backtracks on free Office Live domains

Software maker started charging new customers for domain renewals last year, but had told early customers domains would be registered for free "in perpetuity."

In a reversal, Microsoft says it will now charge all small businesses an annual domain registration fee, even those companies it had promised free Web site registrations for life.

Starting October 1, all customers will have to pay $14.95 a year to renew their custom Web address. Microsoft offers Web site registration as part of its Office Live Small Business service. In some ways, it's understandable, given that Microsoft has to pay fees each year in order to keep renewing the domains.

However, the move does mean the software maker is going back on a promise it made last year. As part of a series of changes made in February 2008, the company said that new customers of Office Live Small Business would have to pay for domain renewals after the first year, but promised that early customers of the services would get their domains registered for free "in perpetuity."

In a statement, Microsoft acknowledged the shift.

"Yes, it is a change," Microsoft said in a statement to CNET News. "As you know, we made a decision in February 2008 to begin charging $14.95 (per) year for custom domain name renewals for new customers. Now, we're asking all customers to pay this same fee once their domain comes up for renewal."

Microsoft did say that the price is quite competitive and noted that the majority of its Office Live small business services are still offered for free. Those that want a Web site for free have the option of moving their site from a custom domain and onto their own portion of the Office Live domain.

However, Microsoft notes that while the Web site will transfer, other data could be lost.

"All e-mail accounts on the expired domain name will be automatically removed and e-mail messages will not be saved," Microsoft said on its Web site, adding a link to a page offering methods of backing up such data.

The move comes as Microsoft is shifting more of its online attention toward bringing the full Office suite on to the Web, as opposed to ancillary services. Free, browser-based versions of Word, Excel, PowerPoint, and OneNote are coming next year as part of Office 2010.

The Office Live Small Business tools date back to the earliest days of Microsoft's Live push, first announced in late 2005 and released in final form in November 2006.