Amazon was first out of the gate as cloud hosting began, but since then, Google’s free services have steadily gained on Amazon’s pay-per-hour services. Today, Amazon looked to tilt the balance back to its side with the announcement of a new free tier of hosting in its Web services cloud.

The new plan offers one year of free hosting on a micro-Linux image with just over 600MB of RAM. Additionally, developers will be able to use Amazon’s S3 storage, Elastic Block storage, load balancing and free data transfers. The service will be free for one year for new users, after which it reverts to traditional pricing by the hour.

“We’re excited to introduce a free usage tier for new AWS customers to help them get started on AWS,” said Adam Selipsky, vice president of Amazon Web Services. “Everyone from entrepreneurial college students to developers at Fortune 500 companies can now launch new applications at zero expense and with the peace of mind that they can instantly scale to accommodate growth.”

In addition to the now-free versions of Amazon’s services, developers will also be able to use some of Amazon’s in-cloud services for free as well, such as Amazon’s Elastic Storage, the SimpleDB distributed database, and a notification service. Users of the free tier of AWS will also be able to use the following free (though limited) services: 1GB of storage on SimpleDB, 5GB of storage on S3, and an overall bandwidth cap of 15GB in and 15GB out per month.

Amazon and Google are now competing directly with each other in the market for free cloud hosting. Google’s AppEngine however, is focused on specific application architectures: Java, or Python and Django, all using MySQL. Amazon, on the other hand, does not limit the choice of developers, and it offers full hosting of anything that will run on the computers they host within their cloud.

The year limit, however, means that developers beginning for free on Amazon will eventually have to turn into paying customers, and this tier of free services will be offered only to new customers.