Microsoft and Google are battling for a $7.25 million contract with the city of Los Angeles to replace the city's e-mail system, according to a story in the Los Angeles Times today.

Both companies have offered up Chief Executives Steve Ballmer and Eric Schmidt to personally meet with officials making the decision in the high stakes competition, the story said.

The article paints the competition as a microcosm of Google's move into Microsoft's territory of business software, including e-mail, word processing and spreadsheets.

Google says its offer is less expensive and more convenient since the documents are stored online rather than on a hard drive, like Microsoft's software.

Microsoft claims Google's software is not secure enough for confidential government communications.

Just to put it in context, Microsoft Business division, which includes Exchange e-mail software, made $4.56 billion in sales in the fourth quarter that ended on June 30. A $7.25 million contract would represent 0.16 percent of that quarter's sales.