Microsoft to acquire Groove Networks

Microsoft Corp. announced plans to acquire collaboration software vendor Groove Networks Inc. of Beverly, Mass. Financial terms of the deal were not disclosed.

Groove's Groove Workspace version 2.5 was one of a number of commercial applications that met the criteria for the Defense Department's Defense Collaboration Tool Suite , a Defense Information Systems Agency initiative to establish a suite of interoperable software for military use.

Microsoft plans to integrate Groove's software, which Groove renamed Groove Workspace for the 3.0 version, into its own family of collaboration products, such as Microsoft Office Live Meeting 2005 and Microsoft Office SharePoint Portal Server, according to the Groove announcement issued today.

Founded in 1997, Groove Networks has 220 employees and reported $21.9 million in annual sales for fiscal 2004, according to Hoovers Online of Austin, Texas.