Interesting Microsoft DOES host domains on live.com
As I investigated the various cloud service offerings from Google and Microsoft I discovered that I was wrong. Microsoft will let you host your domain stuff on live.com - see https://domains.live.com/default.aspx
Just like google you can also link subdomains and have http://mail.example.com http://calendar.example.com etc.
Google still seems to have the upper hand though with blogger and picasa which appear to be superior to Windows live spaces and Photos. Though otherwise the services seem to offer much the same. See Windows Live Services vs Google Apps
There was even something about cobranding your site login by providing branding and you can have an open site where you don't have to create accounts. I don't know if that means you can create a live enabled website trivially but it seems quite interesting.
But Microsoft - I'm still pissed at you for leaving me stuck with all my contacts in outlook so don't think this means you are winning any business without a fight. I'm moving a couple of unused domains one to google and one to live so I can compare and contrast and test with the new phone.