Microsoft is working on an online storage service that looks set to compete with Google's projected Gdrive project.

Company spokesman Adam Sohn confirmed the existence of the project, code-named Live Drive, that looks at using the Sharing Folders feature in Microsoft's Windows Live Messenger to search and share files across PCs. Microsoft is also investigating ways to share and synchronise folders based on Microsoft's acquisition of FolderShare, he said.

Chris Overd, one of the beta testers and Microsoft Most Valued Professionals who writes the LiveSide blog, confirmed via email the development of Live Drive as an online subscription-based storage service that will allow users to access files on their Windows computers via the web.

He also said that since the storage service is expected to be integrated with the Mobility Center feature of the Windows Vista OS, it will be one of the ways Microsoft connects the dots between its Windows Live online services and Windows Vista. Mobility Center gives users a single place to set things like display brightness, power utilization, and other options that are important to mobile users.

"Integration with the Vista Mobility Center makes a lot of sense and will be only one of a number of ways for Vista users to integrate with Windows Live," Overd said.

Vista is the next major client version of Windows that is expected to be available in January 2007.

Live Drive appears to be similar to a service dubbed "Gdrive" in development at Google as a storage drive accessed over the Internet where users can store a host of files that will be accessible by a variety of devices.

Google has not publicly spoken of Gdrive, but the company did let information about it slip during a presentation about its concept of "infinite storage" at its Google Analyst Day in March.

A Google spokeswoman did not immediately return request for comment on Thursday.