Google Docs vs Microsoft Office Live: Round1 (Word like editor)... FIGHT!!!

Today I had a gander at Microsoft Office Live's 'note' functionality which seems about the closest online free offering Microsoft has to the beloved Word. It seems very similar in its approach to Google's Document found in Google Docs. Below are screen shots of the two with a little non-exhaustive comparison of each.














As you can tell from above the are both quite glamorous text editors with similar functionality. Both will allow you to version and share your documents. Google allows for multiple people to work on the same document at the same time, I haven't tested Office Live but it looks to offer the same. Google offers more fonts and more odd ball functions like word count etc. Microsoft has a better UI IMO and convenient ways to organize everything. Office Live shows ads while Google leaves us in peace.
My initial opinion based on the first 5 min run through is that Google still has a better offering, but if Balmer's boys step up their game they could quickly have Google docs as a close second place.