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Microsoft is to include a free, stripped-down version of Office on new PCs from next year, abandoning Microsoft Works after years of service.

Office Starter 2010,  which will be supoorted by advertising, will include Word 2010 and Excel 2010, dropping PowerPoint 2010 and OneNote 2010 - the other applications that will be bundled with the lowest-priced package, Home & Student - as well as Outlook 2010, which is part of the next-level-up Home & Business edition.

Office Starter 2010 will not be a trial edition that times out, said a Microsoft manager today. "Office Starter is different than a trial, in the sense that there's no expiration," said Scott Kahler, the test manager for the new suite, in a video posted on a Microsoft blog. "You can continue using it until your needs exceed what Starter can give you."

At that point, Microsoft hopes that users will pay for a more substantial version. "We insure that when you've upgraded, all your documents come across," added Brian Albrecht, Office's group program manager, in the same video clip. "There's no conversion or anything that needs to happen, and everything's there for you."

According to Takeshi Numoto, the corporate vice president for Office, users who want to upgrade to the Home & Student, Home & Business or Professional editions from Starter will be able to do so within Microsoft's software by purchasing a product activation key online or on a card that will be available at major electronics retailers.

All the bits for those three editions will be installed on new PCs that offer Officer Starter; a purchased key will simply "unlock" the appropriate version, so that no additional software need be downloaded.

Starter 2010's two applications will be "reduced-functionality" editions, said Numoto. But with one exception, he declined to get specific about what would be included in Word Starter 2010 and Excel Starter 2010, or what features within the for-money versions would be omitted.

"They'll suit the basic productivity needs for consumers," he argued, adding that their functionality would be on par with Microsoft Works, which has been criticised for not offering full file compatibility with Office itself. "Word Starter 2010 users won't be able to create SmartArt, for example," said Numoto, citing the single example of a missing feature in the free version. "But they'll be able to edit [other content] in documents that include SmartArt, then return them to the original user without losing any formatting."

Office Starter will include on-screen advertisements, acknowledged Numoto, making it the first edition of Microsoft's long-standing desktop suite to do so. "There will be a tile in the lower-right-hand side of the window," he said, where an ad will be displayed.

Microsoft will also use a new technology, called Click-To-Run, to deliver Office 2010 trial editions to owners of older PCs. The technology, which the company debuted in the Technical Preview of Office 2010 that went out to an invitation-only group of testers in July, "streams" pieces of the suite to users who begin a download, letting them start using the suite within minutes. While users work with the trial, the remainder of the code is downloaded in the background by Click-To-Run.

"It's almost like you're 'playing' the application," Numoto said.

Numoto declined to say whether users upgrading from Office Starter will pay a lower price than the list price of retail boxed copies. "We're not getting into price points at this time," he said.

Microsoft has launched invite-only previews of the desktop version of Office 2010 , as well as the online edition, pegged as Office Web Apps . The latter, which include lightweight versions of Word, Excel and PowerPoint, will be made available to millions free of charge in the first half of next year, the suite's current ship window.

"This is a way for us to reach a lot of customers that we haven't reached before," Numoto said, explaining Microsoft's strategy behind Office Starter, Click-To-Run and the new card-based licences to be sold at retail. "This will get people a taste for Office, people who may not have been exposed to Office before."

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