The online word processing market got more interesting today when Adobe announced their intention of purchasing Virtual Ubiquity, the company that created Buzzword, an online Flex based word processor. Buzzword is currently available in a public beta: you can sign up today and see what its like today.

I've been using Buzzword for a few months now, and I have to say that its probably the best online word processor that I've seen. It is the only online word processor that I know of that does proper pagination, so the documents on the screen look exactly like they do when they print.

Adobe says they plan to incorporate the functionality into future versions of Adobe Connect, Create PDF Online and the Adobe Document Center.

Robert Scoble has more insight on what this means for Microsoft's near monopoly with Microsoft Office, as does Josh Catone at Read Write Web.

Microsoft countered today's announcement with the unveiling of Office Live Workspace. I haven't been able to test that out, but Mary Jo Foley has more information on Microsoft's announcement.