Software giant Microsoft has pumped more than $135m into ailing rival Corel, which recently posted a net loss of $10.7m. The company once had ambitions to compete with Microsoft in the office applications market.
Microsoft has now bought 24 million non-voting shares in Corel, and has agreed to jointly develop and market products related to Microsoft's .Net initiative.
If the preferred shares are converted to common shares, Microsoft would have a 24.6 per cent stake in the Canadian company, which shed one third of its staff last month.
According to Yuval Neeman, vice president of Microsoft's developer division, the vendor is "very excited" about the agreement. "Our two companies will be able to co-operate on projects that will benefit customers worldwide," he said.
Corel has been in financial trouble since a proposed merger with Inprise/Borland, which has $240m in cash reserves, was called off in May after Inprise shareholders balked at the terms of the deal.
At the end of September, an unidentified institutional investor said that it would buy about 20 per cent of Corel stock for more than $50m.
Derek Burney, interim president of Corel, who took over the reins when former chief executive Michael Cowpland resigned earlier this year, said: "We are pleased to announce this development in our relationship with Microsoft. We believe it is an important step forward in our strategy for long-term growth.
"Corel has long recognised the potential of the internet to speed up the delivery of applications and services to its customers worldwide. The .Net initiative promises to be a robust platform we can use to build innovative, easy-to-use and reliable web applications and services that will benefit our customers."
Businesses also admit to holding data without permission of subjects
Zedsphere says end-point security vendor's offerings will be a 'key' feature of its wider portfolio
New acquisition will bring UK cloud service provider's global headcount to over 700
Law firm claims that Oracle lied to investors over what is driving its cloud revenue growth and boosted sales through 'threats and extortive tactics'