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Microsoft has agreed to acquire PlaceWare, a privately held company that provides Web conferencing services for businesses, the software maker has announced.

Microsoft plans to use the acquisition to start a new business unit. Its mission will be to develop products and technologies that let workers collaborate in real time over the Internet, the company said in a statement. The unit will be part of Microsoft's Information Worker group, which makes Microsoft Office.

PlaceWare and Microsoft expect to complete the transaction in the first quarter. The pair are not disclosing financial terms and other details of their agreement.

Online Meetingware

Based in Mountain View, California, PlaceWare offers services that let businesses conduct real-time, interactive presentations and meetings over the Internet. The company was launched in the early dot-com days, and has targeted small and midsize businesses with a range of related products and services.

Participants can view the same files online, including multimedia files, and upload material and retrieve updates. For voice communications, instead of using sometimes unreliable voice-over-IP technology, PlaceWare users place conference calls on the telephone simultaneous with the online meeting. Microsoft described PlaceWare's approach as a "carrier-class" platform that can be used to host collaborative sessions for groups of all sizes, from a few participants up to a few thousand, both inside and outside a corporate firewall.

It competes with WebEx and others. PlaceWare customers include American Express, Johnson & Johnson, and Cisco Systems, according to information on its Web site.

WebEx was quick to issue a statement responding to the deal. It argues that Microsoft wants to acquire PlaceWare primarily to compete with IBM and its Lotus Sametime server software.

Broadening Services

Microsoft is eyeing PlaceWare's established Web services technology for use with its own online services in development, potentially its .Net Web services. The software giant expects to combine PlaceWare's assets with some of its own to develop new online conferencing technologies.

Microsoft plans to share some of those technologies with its industry partners so they can build custom business offerings that use real-time collaboration capabilities, according to the company. The .Net services also involve a number of partnerships with e-commerce vendors and service providers. Microsoft encourages them to use its underlying software services to provide a common access point and functions for customers.

The new Microsoft business unit will be called the Real Time Collaboration Group. It will be headed by Anoop Gupta, a five-year veteran of Microsoft Research who was recently a technical advisor to Bill Gates, Microsoft chair and chief software architect, Microsoft said in the statement.

Gupta will report to Jeff Raikes, Microsoft group vice president of productivity and business services. Web conferencing is a hot area because it can help companies save money by cutting down on travel and boosting worker productivity, George Garrick, PlaceWare's chair, president and chief executive officer, said in the statement.

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