IBM on Monday disclosed how it plans to update its widely used Lotus Notes e-mail and Domino messaging software in the months ahead as it looks to chip away at Microsoft's dominant position in the lucrative market for software used by knowledge workers.

IBM said it would release a minor update to the current Lotus Notes and Domino 8 package in February, with more significant changes planned for the rollout of Notes and Domino 8.5.

Among other things, Lotus and Domino 8.01 will introduce a feature called My Widgets that allows users to quickly gather information from external sources that's related to content found in their Lotus files. For instance, a user could click on an airline flight number in an e-mail message to get the status of that flight.

My Widgets works by virtue of a new IBM technology called Live Text that's context sensitive. Live Text learns to associate certain words or phrases in Lotus documents with the functions delivered by third-party widgets -- including Google Gadgets -- on the user's desktop. Live Text can then automatically activate the correct widget when an association occurs, IBM said.

Beyond airline schedules, the technology could be used to call up stock quotes, weather reports, or custom business data.

Also new in Lotus Notes and Domino 8.01 is Lotus Notes Traveler, which provides real-time, automatic wireless replication of e-mails, calendar, and contact information for Notes users who use Microsoft Windows Mobile-based devices to access their files.

Looking farther down the road, IBM on Monday also disclosed some plans for Lotus Notes and Domino 8.5 -- the first major revision to the software since IBM introduced Notes and Domino 8 last August. As part of 8.5, IBM will update its Lotus Domino Designer application development software to include support for Web 2.0 tools such as Ajax and RSS and Atom content feeds.

IBM did not disclose a ship date or other details for Lotus and Domino 8.5. The company announced the updates in Orlando at Lotusphere, its annual conference for Notes and Domino users.

IBM needs to constantly refresh its Lotus and Domino franchise to keep pace with Microsoft, which controls the majority of the e-mail and messaging market with its Outlook and Exchange products. According to Gartner, Microsoft held 47.8% of the enterprise e-mail market at of the end of 2006, compared with IBM's 42.3% share.

Microsoft's share of the home and small business market is undoubtedly larger.

To date, Lotus and Domino 8, which feature a number of new productivity and collaboration tools, have not had much impact on the market since their third-quarter debut. IBM said last week that sales of Lotus products in its recently completed fourth quarter, excluding currency gains, were flat compared with the same period a year ago.