There's not much information about the developers on the site, but its registrar is listed as Schlund + Partner.

Some initial observations:

Writely is good if you are writing on the fly, need to print out a document quickly, or are collaborating on a document with another writer. But it's not so good if you want to create a PDF document (although the developers say they plan to support PDF and Open Document Format down the road.) And if you're working on a document and your Internet connection drops (as happened to me), you've got problems.

But here's the "Wow" factor: You can save your document to your hard drive as a Word file, or a zip file, and create an RSS feed for your document. That's great if you want others to easily know when you've updated what you're working on. You can collaborate on the document with others over the Web.

They have built in functionality to publish your document directly to a blog, as well.

The Writely folks don't limit how much you can store on their servers, but limit each document size to 500 K in length. That's about the size of a small novel.

In its FAQ, the developers write this:

Our hope is to have the basic service be free, with extras requiring a reasonable subscription fee. (Note that if we add extra features like this to the site, we will indicate in some way that they will be subscription-only in the future.) We will also be charging license fees to corporations, partners, and for custom installations.

If you work in Redmond, Wash., you can console yourself with the thought that this was inevitable. But you surely must be uncomfortable with the thought that this is just the beginning.