Microsoft Corp. and Groove Networks Inc., the leading provider of decentralized software for secure business collaboration, today announced a strategic relationship designed to advance the delivery of Web and peer services to businesses. As part of the relationship, Microsoft has invested approximately $51 million in Groove Networks, resulting in a minority equity stake. Previous investors, including Accel Partners, also participated in Groove Networks� $54 million financing.

"When Groove� was first introduced about a year ago, we indicated how excited we were about the technology, not only because of its advanced use of our .NET tools and infrastructure, but also because it represented a new breed of innovative software that takes full advantage of the PC and the rich communication aspects of the Internet," said Steve Ballmer, CEO of Microsoft. "As our investment indicates, we are even more enthusiastic about Groove today than we were a year ago. We look forward to working with Ray and his team to deliver solutions to our customers that further advance our vision of empowering people through great software -- any time, any place and on any device."