The service, which will be available later this year, will cost businesses $24.95 per month, the company said in a statement.
Microsoft, based in Redmond, Wash., joins a number of its competitors in trying to tap the market for small-business owners. In addition to having to compete with Yahoo Small Business, America Online's Netscape Communications launched "Netbusiness" earlier this month to help small businesses get online.
All of these sites are trying to draw revenues from small-time entrepreneurs looking to the Web to grow their businesses. By doing so, companies are offering a mix of content, tools, e-commerce and Web applications to facilitate the process.
Microsoft's new service will allow small-business owners to register their business name and build a commerce-enabled Web site and will offer email, calendar and document storage applications based on a hosted version of Microsoft Exchange Server 2000 and Microsoft Outlook.
Launched in September, bCentral touts 1 million registered users and is expected to expand later this year, the company said.