Google will announce an initiative on Thursday that will take its applications beyond the web and challenge Microsoft on its home turf of the computer hard-drive.

The internet company is launching Google Gears, an open-source technology for creating offline web applications.

A key differentiator of Microsoft applications is that they can be used without an internet connection. They are launched from the computer’s hard drive and files created can be stored and accessed on that drive.

Google Gears will enable its own applications to have the same capabilities. Google Reader, a news reader, will be offline-enabled from today and other applications would be expected to follow.

“With Google Gears, we’re tackling a key limitation of the browser in order to make it a stronger platform for deploying all types of applications,” said Eric Schmidt, Google chief executive.

Google says Gears will work with all main browsers on all main platforms – Windows, Mac and Linux. But while it says the Firefox and Opera browsers welcome Gears, it made no mention of Microsoft or its Internet Explorer web browser.

Of additional concern to Microsoft will be Google’s decision to “open source” its technology. Google hopes Gears will move the industry towards a single standard for offline capabilities, potentially enabling thousands of applications to compete with Microsoft software.

“Microsoft is either going to have to support this or do something like it,” says David Mitchell Smith, analyst with the Gartner research firm.