This policy setting determines whether Excel 2007 automatically creates hyperlinks when users enter URL or UNC path information.
If you enable this policy setting, when users type a string of characters that Excel 2007 recognizes as a Uniform Resource Locator (URL) or Uniform Naming Convention (UNC) path to a resource on the Internet or a local network, Excel will automatically transform it into a hyperlink. Clicking the hyperlink opens it in the configured default Web browser or the appropriate application. Users will not be able to disable this feature by selecting or deselecting the "Internet and network paths as hyperlinks" check box under "Replace as you type" in the AutoCorrect dialog box in Excel Options.
If you disable this policy setting, Excel will not transform URLs and UNC paths to hyperlinks, In addition, the "Internet and network paths as hyperlinks" user interface option under Excel Options | Proofing | AutoCorrect Options | AutoCorrect dialog box | AutoFormat as You Type tab | Replace as you type is cleared and users cannot change it.
If you do not configure this policy setting, Excel 2007 will automatically transform URLs and UNC paths to hyperlinks and users can change the behavior by selecting or deselecting the "Internet and network paths as hyperlinks" check box under "Replace as you type" in the AutoCorrect dialog box in Excel Options.