The new version of Google Docs sports considerable collaboration tools, as well as improved editing and formatting, a faster, more useful spreadsheet and new collaborative drawing software. It's a worthwhile upgrade to the Web-based office suite, especially for those to whom collaboration is of vital importance. But because it no longer allows offline access to documents (for now), and because it's still not as powerful as Microsoft Office, it's not likely to knock Office off of its throne as king of the productivity suites.
It's likely no coincidence that this major update to Google Docs comes just before Microsoft finalizes Office 2010. Based on what I saw when I reviewed the beta of Office 2010, this new version of Google Docs is far superior to the Web-based version of Office. Those who want to collaborate on documents online will want to use Google Docs, while those who want the most powerful office suite will stay with Office.
Note that by default, current Google Docs users will still be presented with the old version of the Web-based software. You have to actively turn on the new features.
To access the new version, when you're in your Docs list, click the Settings link on the upper right portion of the screen, select Document Settings, click the Editing link, then select the option "Create new text documents using the latest version of the document editor." Reverse those steps if you want to return to the older version of Google Docs.
Keep in mind that, when you create a document in the new version of Google Docs, from then on it will always open in that new version, even if you end up deciding to go back to the old version for creating new documents. In other words, once you create it in the new version, it will always open in the new version, no matter what your settings are.
This holds true even for documents created by other people. So if someone creates a document in the new version, and you haven't yet used the new version and haven't enabled it, when you open that document, it will still open in the new version. Also, if you're using the new version, you can edit documents created with the old version.
New tools for the word processor
Those who use their word processor for collaboration will be particularly pleased with this new version of Google Docs. Unlike in the previous version, you can see the changes that people make in real time as they type. When someone else is typing in a document, a colored cursor moves as they make the changes (each person gets their own color), with the person's name above the cursor.
The other major change for collaborators is that you can now chat as you work on a document. When other people are working on the same document as you, you're shown a list of names on the upper right portion of the screen. Click the down arrow next to a name or names, and a chat sidebar opens that includes a list of all the people working on the document (again, color-coded) and displays an area where you can type to chat and see other people's chats.
These two collaboration features were previously available in the Google Docs spreadsheet, but not its word processor. They may not seem significant, but taken together, they're a major step forward in true collaboration.
There are other useful changes to the word processor as well. Google Doc's word processor has always been severely underpowered compared to Word. This new version is still not nearly as powerful, but some very important features have been added.
Key among these are a ruler and tab stops, making it far easier to create proper margins and to format documents. There have also been several other tweaks, including better handling of comments and images in documents.
What's new in the spreadsheet
The Google Docs' spreadsheet is not as powerful as Excel, but as with the Google Docs' word processor, important new features have been added.
Spreadsheets load more quickly than in the previous version, and scrolling is smoother -- more like a desktop application than a Web-based one, which can be herky-jerky at times.
Also useful is the addition of a formula bar for editing cells. In the previous version, you did your editing in the cell itself, which was difficult because it was hard to read what you were doing and there was little space in which to work. Now it works more like Excel.
Autocomplete has also been added, and you can now drag and drop columns. It's still not Excel, but all these improvements make it far easier to use the Google Docs spreadsheet.
New drawing tool
Google Docs' new drawing tool is fairly rudimentary -- it's very much like Windows Paint. You'll find the usual tools for drawing lines, adding objects and text, filling areas with color and so on. But nothing beyond that, so don't expect to create high-quality graphics.
To use the graphics you've created in other documents, you copy them using what Google Docs calls its Web clipboard, which you access via an icon in the toolbar. This makes it easy to copy items between Google Docs applications and documents. The Web clipboard keeps items pasted into it for a month.
Where Google Drawing beats Paint is in collaboration -- as in the rest of Google Docs, you can chat while using it, and see changes that other people make while they make them. Still, it's not likely that many people will make a great deal of use of this tool.
This new release strengthens Google Docs' collaboration capabilities, and gives it some of the features and benefits of a client-based office suite like Microsoft Office. Based on what I've seen of the Office 2010 betas, it's superior to the upcoming Web-based version of Office, but still not as powerful as the client version.
One major drawback of Google Docs is the lack of offline access for documents. Although Google claims that will be fixed in the future, it gives no date for when it will happen.
Despite the improvements, it's not likely that this new version will convince many people to give up Microsoft Office. However, it may well draw in those who currently use Office, but also want to use Google Docs for collaboration or Web-based document creation and editing. This new version is certainly not anything close to an Office killer, but may well help the overall acceptance of Google Docs.