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GoDaddy CEO Blake Irving, a former Microsoft and Yahoo executive, at the domain giant’s new Kirkland engineering outpost last year.

GoDaddy has struck an exclusive partnership with Microsoft to sell Office 365 email and productivity tools to the domain registrar’s small-business customers — including a streamlined, lower-cost Office 365 bundle.

The partnership was announced this morning. Financial terms of the deal weren’t disclosed. It’s part of GoDaddy’s effort to reposition itself as a one-stop shop for online services for small businesses under CEO Blake Irving, a former Microsoft and Yahoo executive. Microsoft, meanwhile, is trying to expand the reach of its Office 365 email and productivity subscription service in the face of tough competition from Google and others.

The agreement includes a new “Email Essentials” bundle that will start at $3.99 per user/month for GoDaddy customers, about $1 per user/month less than the lowest-cost Office 365 bundle normally available for small businesses. The new bundle, with 5 GB of email storage and 2 GB of cloud storage, was jointly created by the two companies, allowing businesses to have basic email accounts under a custom domain.

GoDaddy will also offer $8.99/month and $12.49/month versions of Office 365 with more features and storage.

GoDaddy, based in Scottsdale, Ariz., has been making a series of acquisitions and announcing new partnerships to support its new strategy of catering to small businesses. The company has also been hiring top software developers and last year opened an engineering office in Kirkland, just down the road from Microsoft’s headquarters.

“We have been looking outside the four walls of GoDaddy,” and the trend is likely to continue as the company aims to strengthen its small-business offerings, said Steven Aldrich, GoDaddy’s senior vice president of business applications, discussing the Microsoft partnership via phone.

Customers will still be able to use a GoDaddy domain with competing email services, but GoDaddy will offer Office 365 with a streamlined installation process that will save “significant amounts of time and hassle,” Aldrich said.

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