Free Web-Based Version of MS Office?

Linux Insider reports that Microsoft is "considering" an
ad-supported version of some of its productivity tools.
This reminds me of an old grade school story problem:
- Two frogs are sitting on a log.
- One is thinking about jumping off.
- How many frogs are on the log?
;0)
When is Microsoft going to make the jump?
Considering that MS Office competition (Google, Open Office, etc.) offers some mighty free and fabulous online productivity tools -- why is MS still sitting on an old, sinking log?
The beta version of MS Office 2007 -- with lots of ribbons and bloat -- is sort of like jumping from a log to a shiny new boat loaded with tons of junk.
Passengers like me are nervously looking for life rafts.
And free online productivity tools like
Google Spreadsheets and the amazing word processing program
Writely run more like speedboats than life rafts. These free programs will get me where I need to go quickly, cheaply, and easily.
And isn't that the very definition of productivity?