Microsoft today agreed to buy assets of Rosetta Biosoftware from biotech giant Merck, bolstering the Redmond company's push into life-sciences technology. Microsoft says the deal will let it incorporate new biotech software into its Amalga Life Sciences system.

In addition, Merck will become an Amalga Life Sciences customer, and help Microsoft incorporate and use the Rosetta technology.

Rosetta Biosoftware is part of Rosetta Inpharmatics, a Seattle-based biotech company that Merck acquired in 2001. Last year, Merck announced plans close the most of the 300-person Rosetta Inpharmatics unit in Seattle's South Lake Union neighborhood by the end of 2009, but Rosetta Biosoftware was expected to continue operating, with about 60 employees.

With today's deal, Microsoft says it's looking to hire some Rosetta Biosoftware employees in key positions.

The Microsoft agreement "establishes a stable and sustainable platform for the Rosetta Biosoftware technology. In addition, we look forward to collaborating with Microsoft to develop new bioinformatic solutions to enable and expedite drug discovery and development,” said Rupert Vessey, vice president, Merck Research Laboratories, in the news release announcing the deal.

Financial terms weren't disclosed. The purchase is expected to be complete at the end of this month, and Microsoft says a new version of Amalga Life Sciences, incorporating Rosetta Biosoftware's technologies, will be available early next year.

Update, 3:30 p.m.: The "build vs. buy" decision was easy in this case, said Jim Karkanias, senior director of applied research and technology for Microsoft's Health Solutions Group, in a phone interview this afternoon. By purchasing the Rosetta Biosoftware assets, he said, Microsoft will be able to incorporate about 10 years of work into the Amalga Life Sciences product offering.

"This is a significant value driver for us," he said.

Microsoft will interview Rosetta employees in hopes of finding good roles for them. Despite the presence of Microsoft operations in the South Lake Union area, people who are hired will be working out of Redmond, he said.

Separately, Karkanias said this acquisition was not the reason Microsoft registered a new LLC (limited liability company) in Delaware recently. That registration has sparked speculation about a possible acquisition. For now, its purpose remains a mystery.