Microsoft acquires Groove Networks

SEATTLE – Microsoft Corp. is acquiring Groove Networks Inc., whose category-leading software helps far-flung business people collaborate, and bestowing the title of chief technical officer on Groove’s founder and chief executive, Ray Ozzie.

Ozzie, a highly respected software veteran and co-creator of Lotus Notes, will report directly to Bill Gates, Microsoft’s chairman and chief software architect.

The acquisition, announced Thursday, is a logical step for the world’s largest software maker as it tries to extend its Office brand in an increasingly mobile business world, where projects are frequently handed off from time zone to time zone.

Major Groove customers include Boeing Co., ChevronTexaco Corp. and Harvard Medical School and various U.S. government agencies.

In addition to bolstering the Office product lineup, Groove’s technology could also eventually find its way into such Microsoft products as the next generation of Windows operating systems, company executives said.

Microsoft and privately held Groove did not disclose financial terms of the deal. The companies have worked closely for years, with Microsoft twice investing an undisclosed amount of money in Groove.

In a conference call, Gates praised Ozzie as a huge contributor to the evolution of Windows, providing the company with substantial feedback over many years.

“I’ve thought about, ‘Could we ever hire Ray and his team?’ for a long, long time, so it’s a big day for me that that’s finally taking place,” Gates said.