The "View in Web Browser" option does not appear as expected when you try to view an Excel workbook in SharePoint 2007

When you try to view a Microsoft Office Excel workbook in Microsoft Office SharePoint Server 2007, the "View in Web Browser" option does not appear as expected in the drop-down list for the Excel workbook. This issue occurs when you view the SharePoint Server 2007 document library on a remote client.

This issue occurs if the Excel workbook has an .xls extension.

To work around this issue, use an .xlsx or .xlsb extension when you save the workbook in Excel 2007. Then, publish the file in SharePoint Server 2007.

This behavior is by design.

Excel Services in SharePoint Server 2007 only supports Excel 2007 workbooks that have an .xlsx or .xlsb extension.