Microsoft is inviting a limited number of customers to check out Office Web Apps, its competitor to Google Docs. Based on feedback from those technical preview customers, Microsoft will make adjustments to free Web apps before it makes them widely available in the first half of next year.

Google already offers a free online alternative to Microsoft Word, Excel and Powerpoint that makes it easier to create, edit and share files with many users across the Internet. The documents all operate in the Internet browser window. Microsoft documents can only be shared either from a common disk drive or by e-mailing it back and forth as an attachment.

Some interesting features Microsoft is talking about for Office Web Apps:

• Users can embed parts of documents from Office Web Apps in blogs and other social networking media, similar to how a YouTube video can be embedded in a blog post.
• The applications will be available through Windows Live Skydrive, a free online storage site Microsoft offers.
• The Web Apps will work with desktop versions of Office 2010 as well, so people who are using Office 2010 can open documents from the Web Apps.

Office Web Apps will be available free to anyone through Windows Live. Businesses that want more control and security can license it through Microsoft Online Services or host it on their own servers.

Here is a longer story we did when they were first announced in July.