Microsoft's first mice were not noticeably different from Genius mice and the optical technology was acquired from Agilent Systems.
Photosynth was developed by Seadragon Software and acquired by Microsoft in 2005.
Microsoft is magnificent in leveraging their considerable war chest to buy innovation and putting on a fresh layer of shrinkwrap.
I tried Genius mice, and they weren’t as good. I also tried optical mice, but up to that point I remember them requiring a special mouse pad that had markings the mouse could pick up. The Intellimouse was still the first really good mouse I ever used.
Didn’t know that about Photosynth though.