Watch out Google Docs – Microsoft SkyDrive is coming to town.

When it comes to online storage, people think immediately of Xdrive or Idrive.

On January 12, 2009, AOL will permanently close the Xdrive Online Storage Service. Idrive is free for the first 2Gb. For more storage, you can get 150Gb for $4.99 per month.

I personally use PCNow from WebEx, which comes with a 5Gb of online storage.

Now Microsoft has introduced an upgraded version of Live SkyDrive, a free online file storage service,

SkyDrive can download an entire folder as a local zip file, which is great if you have a bad Internet connection and save you a lot of time. Unlike JPG and GIF files that don’t compress very well, Word and text documents can be compressed up to 10:1.

You get 25 GB of free online storage space for your documents, photos, music, and all other files. Of course, FREE is good.

Of course, it is integrated with Microsoft Live for social networking files, so file sharing is quick and easy amongst friends and family.

What the heck does this have to do with Google Docs?

Microsoft is coming out with the Online Office suite to compete with Google Docs. I am sure it will integrate with Hotmail or Live.com email accounts and possibly be a major competitor in the marketplace. Especially if you refuse to upgrade to Office 2007.

If that is the case, then I can see SkyDrive being integrated as well.

Last time I checked, Google doesn’t have an online storage solution. I used Yahoo Photos back in 2005 and was great but very limited in size. Now, Google Picasa is GREAT for sharing photos, what about Word, Excel and PowerPoint slides?

With law enforcements and customs offices allowed to search your computer’s laptop when crossing the USA-Canadian border, it only makes sense NOT to carry any “inappropriate” files.

I’ll let you define the term “inappropriate”.