buzzword.jpgVirtual Ubiquity has just released more group features for Buzzword, its powerful new word processor.

The word processor, still in a private testing mode, is notable because it puts the key desktop features popularized by Microsoft Word onto the web, including desktop-style formatting and commenting. The Buzzword upgrade now lets you add multiple authors to a document, add icons to user profiles, print comments and scroll more seamlessly through long documents.

No other online word processor, including Google Docs, can currently match it. However, Google’s momentum is significant, as it integrates Gmail with Docs, Spreadsheets, Calendar and other applications — making its overall offering steadily more useful to most people. Google’s brand power is dominant, too.

Both companies are preparing to push their products to students starting school this Fall. While Buzzword may be a great stand-alone product, we think it will need more than support from its investor and technological benefactor, Adobe, if it is going to challenge the Google juggernaut.

The product is already a showcase for Adobe’s AIR, a Flash-based platform for developers to build such “rich internet applications” (AIR stands for Adobe Integrated Runtime and had previously been code-named Apollo). This has resulted in some great Buzzword features. One is real, working what-you-see-is-what-you-get (WYSIWYG) document formatting: people can actually view, edit then print a document from the web without affecting its formatting. Contrast this with Google Docs and most other online word processors, where text appears differently across web browsers and computer screens — which leads to confusion about how final drafts will appear in print. Buzzword also features in-line notes, where users can leave notes for each other in reference to particular sections of text. It lets users work offline then sync back once an internet connection is made — good while on a plane, for example (discussion here).

Boston-based Virtual Ubiquity, backed by Adobe, may not have near the same recognition as Google, but Buzzword has made an impression on the tech crowd. Here’s Robert Scoble’s take after a demo at a conference last winter: “I have a new way for rating how cool a demo is. How many keystrokes per second can I count [in the audience]? You know, tap, tap, tap, tap on keyboards. Virtual Ubiquity is on stage right now showing off a killer Word Processor that works online. Teaches Microsoft quite a few lessons.”

AIR is, in a nutshell of oversimplicity, Adobe’s bet that users want a “richer,” more desktop-software-like experience on the web (in-depth coverage of it here).

Meanwhile, Google’s big bet is that what users want first and most of is interconnectivity between applications. Google employees tell us Docs has been experiencing a “near-vertical” growth rate almost entirely due to its integration with Gmail. When a Gmail user receives an email with a Word document attached, she can open it in Google Docs instead of downloading it and opening it in Word. Google has also recently parried AIR’s offline option with Google Gears (our coverage), which allows web applications to be taken offline, similar to Buzzword; and it’s already available for Google Reader. Furthermore, Google Docs’ upgrade last week introduced folders and better search. The company has been working hard to make its Apps the educational software solution of choice for students and their universities.

So where does this leave AIR? We’ve covered how Adobe has set $100 million aside specifically to fund Virtual Ubiquity and other companies that showcase AIR. If Adobe’s goal is to demonstrate how it can help to make companies successful, why not go for integration with Adobe’s many other high-quality, powerful applications? Photoshop for editing photos, Illustrator for digital drawings (etc.), InDesign for print layout, and other Adobe desktop software, are already staples of designers and publishers everywhere, and present in many classrooms. In fact, a separate Adobe word-processing product, InCopy, is actually designed for workflow processes that feed into InDesign. If the company can find ways to integrate Buzzword in a useful way with other Adobe software, this would at least partially counter the usefulness of integrated Google Apps.

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