Microsoft Corp. announced that it will acquire Groove Networks Inc. 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. The acquisition also brings to Microsoft founder Ray Ozzie, a creator of IBM Corp.’s Lotus Notes. Ozzie will assume the role of chief technical officer, reporting to Bill Gates, with responsibility for influencing corporate-wide 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. Groove has worked closely with Microsoft for nearly five years. After the deal is completed, the nearly 200-person Groove organization will continue to operate from its Beverly, Mass., headquarters as part of Microsoft’s Information Worker Group. The acquisition is expected to be complete in the second quarter of 2005. Groove will continue to operate as a separate company until regulatory requirements have been met and the acquisition is finalized. A free trial edition of Groove Virtual Office is available. www.groove.net, www.microsoft.com

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