Microsoft Corp. (MSFT) wants to sell smaller businesses on the idea that its products can offer the traditional benefits of desktop computer software while taking advantage of growing Web-based tools.

At a Microsoft-sponsored conference in Dallas this week, the Redmond company plans to promote ways that Dynamics, its specialized applications aimed at small- and mid-sized businesses, can incorporate Web-based applications to quickly get information.

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For example, an accountant who is using a Dynamics product with an Excel spreadsheet from Microsoft's Office suite could incorporate data from a supplier via an RSS feed, technology that immediately notifies a user when new content has been added to a Web site.

"We're adding this third piece, which is the integration of the online community and online services," said James Utzschneider, general manager of marketing for the Dynamics product line.

Microsoft is facing intense competition from companies such as Salesforce.com Inc., which provide specialized business software over the Internet. Such products could potentially threaten Microsoft's desktop PC applications.

Microsoft has pledged to offer more Web-based products of its own, while simultaneously beefing up ways in which its desktop products work with online applications.

Utzschneider said Microsoft believes some companies will want desktop applications, while others will want to incorporate more Web-based applications down the road.

"We truly and deeply believe that it will be a hybrid model," he said.

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