Microsoft Acquires FolderShare for Windows Live

AudioGalaxy founder Michael Merhej is now a Microsoft Employee with grand plans. On Thursday, Microsoft announced it had acquired Merhej's new company, FolderShare, which provides software to remotely access and synchronize files. Microsoft will incorporate the technology into its Windows Live services.

With its launch in 1999, AudioGalaxy pioneered P2P technology and quickly became the number-one file sharing service online with over 80 million users. But after Napster came crumbling down in 2000, AudioGalaxy was a prime target for the RIAA and Merhej opted to close up shop rather than face the legal attack hounds.

But Merhej took what he learned and applied the same concepts and technology to a more legitimate business, which became known as FolderShare. Users of the free service simply download the FolderShare Satellite -- the name Merhej also gave to his AudioGalaxy software -- that keeps track of document changes and offers remote access to files using a Web browser.

FolderShare parent company ByteTaxi says its target audience is anyone needing to share files with friends and colleagues, or those with multiple devices who want to keep their documents always up to date wherever they are. The approach seems to be working; in the last year, the service counted 350,000 users.

Microsoft has not said what it plans to do with the FolderShare technology, but promised to keep the free service running as is. The acquisition fits into the company's new Windows Live vision of online services to complement Windows desktop functionality.

A company spokesperson did offer BetaNews one example of how it envisions integrating FolderShare into future offerings.

"On Nov 1, we announced Windows Live and one thing we demonstrated in the technology preview of Windows Live Messenger was something called Sharing Folders that allows two Messenger contacts to set up synchronized folders. FolderShare technology could potentially help us add additional features to this basic level of functionality in the future," the spokesperson said.

But for now, no "Windows Live Remote Access" or "Windows Live File Sync" service has been announced.