Microsoft to Acquire Groove Networks

Mar 11, 2005

Microsoft Corp. has announced that it will acquire Groove Networks Inc., a provider of collaboration software for the virtual office. The addition of Groove products to the lineup of Microsoft Office System products, servers, and services is intended to build on the capabilities of Microsoft's current collaboration products.

The acquisition also brings Groove executives to Microsoft, including founder Ray Ozzie, a creator of IBM Corp.'s Lotus Notes. Ozzie will assume the role of CTO, reporting to Bill Gates, Microsoft founder, chairman, and chief software architect, with responsibility for influencing corporatewide communication and collaboration offerings and associated platform infrastructure. Ozzie also will continue his work with the Groove team, which will be part of Microsoft's Information Worker Group.

After the deal is completed, the Groove organization will continue to operate from its Beverly, Mass., headquarters. The acquisition is expected to be complete in the second quarter of 2005. Microsoft and Groove plan to provide customers and third-party partners with uninterrupted product and service offerings. Groove will continue to operate as a separate company until regulatory requirements have been met and the acquisition is finalized. Financial terms of the acquisition were not disclosed.