Microsoft is bullish enough on Internet phone calls and Web meetings that it's coming out with special Office software to support them.

At a press conference in San Francisco on Tuesday, Microsoft chairman and chief software architect Bill Gates unveiled a product, Office Communicator 2005, and updates to two others that promise to make it easier for workers to manage their phone calls, E-mail, and instant messages from the same place. Office Communicator, which is due in June, will let workers set up phone calls from Outlook; use one set of contacts for E-mail, instant messaging, and Internet calls; and let other users see whether they're at their desks, on the move, or offline, and route incoming calls accordingly.

"Communicating in a better way has a huge impact for business," Gates said. The PC, cell phone, and desktop telephone are "a triumvirate that should work together," he said.

Microsoft is trying to leverage the market share of its Office productivity suite and Windows operating system to head off inroads into the growing voice-over-IP market by companies such as Avaya Communications, Nortel Networks, Time Warner's America Online unit, and Vonage Holdings. Office, which Gates called the "most-used software application of all time," is evolving "way beyond what people thought of as a single person with a spreadsheet or a word processor." He added, "Voice over IP is exploding."

Businesspeople's collaboration should go "well beyond E-mail," to include audio, video, and screen-sharing capabilities, Gates said. PC users should also have one set of electronic contacts that shows up in all the software they use. "You'll never want to think of a sales report being on a piece of paper again," he said.

To use Office Communicator, companies will also need to buy Microsoft's Live Communications Server 2005, which came out last fall. At the end of this month, Microsoft plans to release an update that will let customers license the ability to use Office Communicator or Windows Messenger with the server to instant message with users of the AOL, MSN, and Yahoo consumer networks. The server also includes new capabilities to block IM spam. Office Communicator will be sold as client-access licenses purchased with Live Communications Server, Microsoft corporate VP Anoop Gupta said in an interview.

The company also plans to release a version of its Live Meeting software for Web conferencing. Live Meeting 2005 includes the ability to schedule meetings from an Outlook calendar, as well as new video codecs for higher quality and less network bandwidth consumption. It will be available this week as a Windows client or a version that runs in a Web browser.