Microsoft on Wednesday formally launched the newest version of its Office productivity suite with an eye to protecting its turf on the desktop while forging ahead on the Internet, where the company is battling Google for the increasingly important Web-based computing market.

Microsoft Office 2010 includes updated versions of traditional desktop applications like Word, Excel, and PowerPoint, as well as Internet versions of the apps that Microsoft has labeled Office Web. Office Web apps are free for consumers and also available at no charge to Microsoft’s corporate software subscribers.

Along with Office 2010, Microsoft also released the SharePoint 2010 collaboration suite.

“Office 2010 and SharePoint 2010 define the future of productivity,” said Stephen Elop, president of Microsoft’s business division, in a statement. “With the 2010 set of products, organizations will save, innovate, and grow as their people benefit from working across the PC, phone, and browser,” Elop said.

Office 2010 offers a number of enhancements over its predecessor, Office 2007. It includes new broadcast capabilities for PowerPoint, an auto-preview function in Word, and a new feature in Excel, dubbed Sparklines, that generates trend visualization graphics.

The Office Web apps, meanwhile, offer collaboration tools that let users share documents over Internet.

Microsoft needs to expand its presence in Web-based, or cloud, computing, as rival Google is making strides with its online Google Apps suite. Even though administrators at Yale and the University of California, Davis, recently decided Google Apps wasn’t for them, the product is being used by an increasing number of budget-conscious educational institutions and government agencies.

Office’s ubiquity in the corporate market, however, could give Microsoft an edge in terms of pitching its cloud offerings to enterprise users. Pharma giant Novartis, for instance, recently adopted Microsoft Online Services, which includes Office Web, for 100,000 employees worldwide.

“It will enable our large research and development population to better collaborate and innovate,” said Novartis CIO Leon Schumacher.

“We can trust Microsoft to provide the enterprise capabilities our company requires to further improve personal productivity and collaboration among our associates so we can focus on our core mission—improving the lives of patients,” said Schumacher.

Consumers who opted for the fully packaged version of Office 2010 while pay a hefty surcharge for the option.

The boxed version of Office 2010 Professional is a whopping $499, while the download is $349. There’s also significant price discrepancies between boxed and download delivery for other versions as well. For the Home & Student version, it’s $149 vs $119. For Home & Business, it’s $279 vs $199.

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