Microsoft has agreed to buy Greenfield Online, the owner of European price comparison website ciao.com, for about $486 million to boost its e-commerce business and Internet search in Europe.
Ciao.com, a site to offer advice on purchases, mainly of consumer electronics, and encourages users to join a network of shopping experts to share opinions. It makes its revenues from merchant referrals, e-commerce, and advertising sales.
Microsoft, whose $47.5 billion bid to buy Yahoo earlier this year failed after a protracted battle. As you may see, Internet search is still dominated by Google, which has 62 percent of the global search market and 79 percent in Europe. Ironically, Microsoft has only a 2 percent market share in Europe and 9 percent worldwide, behind both Google and Yahoo. In Europe, Microsoft is also outranked by online auction site eBay and Russia's Yandex.
According to Microsoft's vice president for Windows and online services, Tami Reller said, the team at Ciao has built a passionate consumer community based on intuitive technology and extensive merchant relationships that Microsoft believes will deliver incremental benefit to the its Live Search platform.
Microsoft's offer of $17.50 per share betters an earlier proposal by media-focused U.S. buyout firm Quadrangle Group to acquire the company for $15.50 a share, and represents a slight premium to Greenfield's closing price of $17.25 on Thursday. In addition, On August 26, Greenfield had said it had received a $17.50 per share offer but did not reveal from whom. The latest offer represents a premium of about 10 percent over Greenfield's closing share price on August 25.
Microsoft said it had agreed to sell off Greenfield Online's main business that surveys consumer opinion online and sells the results to market researchers, to an unnamed financial buyer. The companies expect both deals to close during the fourth quarter of 2008. Moreover, the completion of the Greenfield sale to Microsoft does not depend on Microsoft's disposal of the online survey business.
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