[andreyf]

This seems like another Google offering that they don't take particularly seriously

I don't think so, Google's hosting is going to bite into MS's market of IIS and Windows Servers just like GMail/Calendar is competing with Outlook/Exchange.

[briansmith]

Microsoft is countering with hosted Exchange service and hosted SQL Server services. I think hosted Exchange will be a lot more profitable than (ad-free) GMail hosting can ever be.