By Eric Auchard

SAN FRANCISCO - IBM's Lotus unit will introduce a set of social networking services that functions like a MySpace for office workers and which analysts say marks a renewed challenge to Microsoft Corp.

Lotus is going back to its roots as a pioneer of business collaboration software with a service called Connections that features the latest ways for users to share information via the Web, while giving businesses controls over who sees what data.

Lotus Connections offers the business equivalent of Web meeting places like MySpace.com or Facebook, Yahoo Inc.'s bookmark sharing site del.icio.us and blog search tools like Technorati.com -- stitched together in one package.

Peter O'Kelly, a collaboration software expert with Burton Group, said the new software from IBM Lotus promises to shake up a market dominated by Microsoft, where IBM, Oracle Corp. and Adobe Systems Inc. also compete.

"This is going to rekindle the competition between Microsoft and IBM," O'Kelly said. "I think IBM is playing offense here."

The new offering could chip away at Microsoft's lead in the collaboration and e-mail messaging market, where five years ago Microsoft Outlook e-mail and its newer SharePoint collaboration software began to surge past rival IBM products, O'Kelly said.

While exact numbers are hard to come by, last year IBM said Lotus Notes had 125 million users. Adding in collaboration software, Lotus users number around 150 million, O'Kelly said. Microsoft has 200 million Outlook users and signed up another 80 million licensed users of SharePoint software, he estimated.

TEAM PRODUCTIVITY

IBM officials see a shift in focus from the quest for personal productivity that characterized computer advances of the 1990s to the "team productivity" which Web-based collaborative tools have begun to enable in recent years.

Connections combines five components: member profiles, activities, blogs, communities and "dogear" -- IBM's word for how users identify and share Web bookmarks with colleagues.

Connections uses the popular Web navigation technique of "tagging" to help users track popular discussion topics and figure out who may have expertise on any subject.

The software provides a way for individuals to quickly set-up ad hoc groups to collaborate on projects, storing relevant documents, e-mails and Web sites together. Each user can publish blogs to share ideas with colleagues.

"What Web 2.0 has demonstrated is that self-defining communities often do a better job of locating relevant information," IBM software chief Steve Mills said. "This helps with the rapid identification of expertise and experts."

Lotus Connections will become generally available later in the first half of 2007. Pricing hasn't been disclosed.

It is designed to run as a separate set of Web services that work for both existing and potential new Lotus customers.

It acts as an enhancement to, but independent of existing Lotus software such as IBM's e-mail, group collaboration and document management system, Lotus Notes, and IBM's business instant messaging system, Sametime. It's also meant to work for customers of Microsoft's database, e-mail and Web software.

"We believe it is relevant for non-Lotus Notes users as it for Lotus Notes customers," Jeff Schick, vice president of social software for Lotus, said in a phone interview.

O'Kelly said IBM's Web software could cause many corporate buyers who stopped considering Lotus Notes a decade ago to reconsider their reliance on Microsoft's rival software suite.

Revenue in the Lotus division grew 30 percent during the latest quarter compared with the final quarter of 2005, IBM reported last week. The company will demonstrate the service at its annual Lotusphere customer conference this week in Orlando, Florida.