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Microsoft to acquire Web conferencing provider

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

Microsoft will use the acquisition to start the Real Time Collaboration Group - a business unit - which will develop products and technologies allowing workers collaborate in real time over the internet. The unit will be part of Microsoft's Information Worker group, which makes the Office applications suite.

The transaction is expected to close in the next few months. Financial terms and other details have not been disclosed.

PlaceWare offers services that let businesses conduct real-time, interactive presentations and meetings over the internet. Its customers include American Express, Johnson & Johnson and Cisco Systems.

Microsoft will combine PlaceWare's assets with some of its own to develop online conferencing technologies. It will share some of them with industry partners, allowing them to build custom business offerings that use real-time collaboration capabilities. The goal is to boost the productivity of what Microsoft calleds "information workers".

Giga Information Group analyst Rob Enderle characterised the technology behind PlaceWare's service as "the big brother to NetMeeting", Microsoft's existing online collaboration software offered with Windows 2000.

While NetMeeting only works well for groups of five or six people, PlaceWare's software can scale up to support hundreds or even thousands of users.

PlaceWare's competitors include WebEx Communications, which is larger than PlaceWare, because it managed to attract greater levels of investment. WebEx will now face "a much greater level of competition" in the form of Microsoft, Enderle said.

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