The scenario he presented Tuesday sounded similar to how developers can easily build applications for the social-networking site Facebook and allow users to share those applications across the platform. Mital said Microsoft built Live Mesh on Web development technologies that are emerging as standards for Web 2.0 development -- such as representational state transfer (REST) and Atom Syndication Format -- that any developer has access to and can use.

Facebook has found a viable business model in advertising-supported social networking, so it may be that Microsoft is planning something similar for Live Mesh. Mital said Microsoft is considering several possible business models for Live Mesh, including using online advertising to support it or charging users a subscription fee to use it.

Microsoft is giving 10,000 users access to the Live Mesh preview by invitation, through a Windows Live ID. Initially, the service will be available only for PCs or laptops running Windows XP or Vista; in a few months, Microsoft will make Live Mesh available for Mac users and also mobile devices, beginning with the Windows Mobile platform. Eventually, devices such as the Zune, Xbox and digital photo frames could also be part of Live Mesh.

Mital acknowledged that once mobile devices can be added to Live Mesh, user access will be limited to the presentation and application capabilities of the devices. Microsoft is also working on a way to display an image of a document, such as an Excel document, from Live Mesh on a phone's browser so that users can at least view a document, he said.

Nancy Gohring in Seattle contributed to this report.