Corel is to acquire Toronto-based XML (Extensible Markup Language) developer SoftQuad Software in an all-stock transaction valued at $37 million.

The acquisition furnishes Corel with another building block for developing solutions to offer as part of Microsoft's .NET strategy - Microsoft's platform for XML Web services. These are platform- and language-independent applications that can share data online.

Corel can now deliver a product that will allow customers to create, manage and simultaneously publish content across multiple delivery-channels. SoftQuad has partnerships with makers of content-management systems, Corel said.

The company plans to offer tools for Corel's equivalent of network publishing. This strategy is being widely adopted by conventional print-based companies, as they move toward producing tools for multiple content-delivery services. Such companies include Adobe and Quark.

Microsoft has its own version of the strategy, .NET. It invested $135 million in Corel last October. In exchange, Corel pledged to make its products work with Microsoft's .NET initiative. .NET also makes use of Microsoft's own version of Java. Microsoft dropped support for Sun's Java standard in July.

Corel CEO Derek Burney denied Corel's ties with Microsoft had any bearing on the deal: "Corel is exploring its own strategy," he affirmed. The company plans to extend the XML capabilities in WordPerfect, and to integrate XML into all its product lines.

The deal is expected to close in six weeks. "All the key pieces are there" for Corel to be a major company again, Burney said, noting that Corel will likely not pursue further acquisitions. "There's really nothing missing at this point."

XML (Extensible Markup Language) is an official Web standard that lets developers create common information formats and share both format and data over the Web. It enables publishing to a myriad of XML-supporting Web sites and devices.