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Tuesday, March 9, 2010

Google takes aim at Microsoft with acquisition


SAN FRANCISCO (Yahoo) – Google Inc stepped up its assault on Microsoft Corp's productivity software business with the acquisition of a small start-up company that allows Microsoft users to edit and share their documents on the Web.

Google said on its company blog on Friday that it has acquired San Francisco-based DocVerse. Terms of the deal were not disclosed.

"With DocVerse, people can begin to experience some of the benefits of Web-based collaboration using the traditional Microsoft Word, Excel and PowerPoint desktop applications," Google Product Manager Jonathan Rochelle said in the blog post.

The deal represents the latest move in the competition between Google, the world's No. 1 Internet search engine, and Microsoft, the world's biggest software maker.

Microsoft has boosted investment in its Bing search engine during the past year, while Google is developing a PC operating system dubbed Chrome OS that will compete with Microsoft Windows, the software used in the vast majority of the world's PCs.

Google is also trying to lure users to its Web-based productivity software, known as Google Docs, which competes with Microsoft's dominant Office software package.

In an interview with Reuters, Google's Rochelle said that DocVerse software makes it easier for users and businesses to move their existing desktop PC documents to the Internet "cloud," where the documents reside on the Web and can be accessed from any PC.

Google "fell in love with what they were doing to make that transition easier," Rochelle said of DocVerse.

Microsoft's business division, which makes Office, is the most profitable unit of the company, generating more than $12 billion in profit last fiscal year, more than half Microsoft's $20.4 billion overall profit.

Microsoft said in an emailed statement that Google's acquisition of DocVerse acknowledges that customers want to use and collaborate with Microsoft Office documents. "Furthermore, it reinforces that customers are embracing Microsoft's long-state strategy of software plus services, which combines rich client software with cloud services."

The DocVerse deal is Google's second acquisition announcement this week, and marks the company's fourth acquisition in less than four weeks.

San Francisco-based DocVerse was founded in 2007 by a pair of former Microsoft managers. The company has less than 20 employees, according to co-founder Shan Sinha and had raised nearly $1.5 million in funding prior to the Google deal.

According to a report in the AllThingsDigital blog, citing unnamed sources, the price of the deal was between $25 million and $30 million.