Small businesses and organizations have long been caught in a kind of virtual Slough of Despond when it comes to managing their e-mail systems, designing and maintaining their Web sites, and scheduling their business lives with a group calendar. Because they can't afford their own IT staff and network infrastructure, they either do without, or else pay too much money for too few services for outsourcing or hosting.

If you believe Google and Microsoft, small business salvation is at hand. Both have recently launched free -- yes, that's right, free -- services for small businesses. Google offers Google Apps For Your Domain, while Microsoft has its Microsoft Office Live Basics. Both services are currently in beta, and both in essence function as loss leaders, because both Google and Microsoft will offer fuller featured for-pay versions of the services. (Microsoft offers Office Live Collaboration for $29.95 per month and Office Live Essentials for $29.95 per month, while Google has not yet announced the name and pricing of its for-pay service.)

Which one is best for your organization? I put them through their paces side by side. Overall, as you'll see, Google's service beats Microsoft's because of its superior e-mail, and because it offers a calendar, something that Microsoft does not. But if your primary focus is on Web site building, you'll instead want to use Microsoft's service.

Read on for the nitty-gritty details.

Initial Setup
For small businesses that are setting up e-mail and managing a Web site through either Google Apps for Your Domain or Office Live Basic, one of the most daunting tasks will be the initial setup and configuration. After all, the whole point of these free tools is that they're for organizations without IT staffs -- and for normal folks, handling the requisite domain registration or transfer, DNS server setup, etc. can be a difficult task.

Which is better at the job? That depends on your needs. If you already own a domain, then Google wins hands down, offering simple-to-follow advice and directions. But if you're setting up a new domain, then Office Live Basics is your best bet, because it offers domains for free -- and Google doesn't include tools for domain registration.