Canadian kit vendor Nortel continued its spending spree this week, announcing the acquisition of a 3D voice firm to spur on its move into the realm of virtual worlds.

The $7m acquisition of DiamondWare is Nortel’s second acquisition in as many weeks, following the purchase of unified communications firm Pingtel, and is yet more evidence of the embattled vendor’s efforts to turn itself into a software-centric company.

Nortel is changing its strategy in a bid to turn its fortunes around, as it continues to combat growing losses. Net losses for the second quarter hit $113m, compared to a loss of $37m in the same period last year.

DiamondWare will give Nortel a voice platform that offers a more ‘immersive’ experience for traditional telephony and Web 2.0 virtual environments, or so the company says.

The thinking behind the deal is that Nortel’s next big hope looks to be virtual – virtual worlds to be specific. This week the company also lifted the curtain on its web.alive platform – a virtual world software application that provides an “immersive, interactive and web integrated world with 3D voice and graphics, facilitating internal collaboration as well as customer and partner interactions over the web”.

The platform is being developed under the ominous codename of “Project Chainsaw”.

“People are no longer satisfied with existing collaboration tools or with static web sites supported only by a telephone contact centre as the main point of interaction. They want to discuss potential purchases with others, exchange ideas, make business proposals, and fluidly interact with others in real-time,” said Arn Hyndman, web.alive chief architect. “Additionally, web.alive will offer security not available with other virtual environments today because it is integrated with corporate enterprise systems and software.”