"Ray and his team are true innovators," said Bill Gates yesterday as Microsoft announced that it's acquiring Ray Ozzie's company, Groove Networks, Inc. "Microsoft and its customers will greatly benefit from their experience," Gates continued. "After working with Ray for years as a close partner, it will be great to have him on our senior leadership team."

Ozzie's Groove Networks is a leading provider of collaboration software for the "virtual office," so the deal unites two top innovators of technology that help geographically distributed workgroups be as productive as those that work in a single physical location.

Financial terms of the acquisition were not disclosed.

"The acquisition of Groove complements Microsoft's collaboration offerings to include real-time, server-based and peer-to-peer solutions that address the ever-changing and more-complex work environment," said Jeff Raikes, group vice president of Microsoft's Information Worker Group. "Together, Microsoft and Groove will make anytime, anywhere collaboration a more natural and easy extension of how information workers coordinate their projects and document- centric work."

The addition of Groove products to the lineup of Microsoft Office System products, servers and services builds on the capabilities of Microsoft's current collaboration products, allowing Microsoft to better meet the needs of organizations of all sizes that increasingly are creating borderless project teams comprising employees, customers, partners, suppliers, contractors and others.

The acquisition also brings to Microsoft the development talent and technology leadership of top Groove executives, including Ozzie, a creator of IBM Corp.'s Lotus Notes. Ozzie will assume the role of chief technical officer, 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.

"We developed Groove's highly security-enhanced virtual office technology to help businesses and individuals - wherever they are, whenever they work - overcome the challenges presented by today's increasingly decentralized work environment," Ozzie said. "By joining forces with Microsoft, we can more effectively address the needs of information workers for collaboration solutions that 'just work' across organizational, geographic and network boundaries."