Seattle — Microsoft Corp., the world’s biggest software maker, today announced its first major deal since its foiled attempt to acquire Yahoo Inc., reached an agreement to acquire a Munich, Germany-based Web comparison shopping site and its parent company Greenfield Online Inc., owner of Ciao GmbH, for about $486 million in cash, in a move that will extend Microsoft’s search and e-commerce services in Europe.
The Redmond, Washington-based software giant states that the acquisition of Greenfield Online Inc., which owns Ciao, a collection of European price-comparison, shopping and consumer reviews sites in seven countries and languages, will boost its search presence in Europe.
According to the terms of the agreement, Microsoft will commence a cash tender offer to purchase all outstanding shares of Greenfield Online for USD 17.50 per share in a transaction valued at approximately USD 486 million.
Greenfield, based in Wilton, Conn., uses the Internet to survey panels of travelers, shoppers, pet owners, doctors and other consumers and professionals around the world. Its clients include consumer products makers such as gas and charcoal grill maker Weber-Stephens Products Co. The company holds broad operations in Europe and runs an online service called Ciao portals that lets Internet users review products and merchants.
Ciao has an extensive source for intelligent shopping on the web, combining consumer reviews and ratings from a multimillion-user-strong online community with up-to-date price information from thousands of online merchants.
Ciao’s technology platform, online community and extensive merchant relationships will be integrated within the Live Search platform to deliver a richer, more rewarding experience for both advertisers and consumers.
Ciao sites currently get more than 26.5 million unique visitors per month across seven countries, and so far have generated more than 5 million product reviews.
This acquisition signals a further milestone investment for Microsoft in Europe and will see Microsoft increase its European commercial search capabilities as part of its intent to make Microsoft Live Search the premier destination for consumers looking to research and purchase goods and services online, as well as enable merchants to drive greater online sales.
“Ciao’s success has been led by a team of talented people who took a unique combination of intuitive technology and the insight that comes out of their passionate consumer community to become one of Europe’s leading shopping comparison sites,” said John Mangelaars, vice president, Consumer and Online, Microsoft Europe, Middle East and Africa. “This makes the company a fantastic asset to the future of our search offer. Integrating Ciao’s capabilities into Live Search will provide a strong launch pad for our commercial search offer in Europe and enhance our e-commerce offering on MSN.”
Microsoft lags market leader Google Inc. in search traffic and Web advertising revenue. Without Yahoo, the software company is now seeking to complement its own online services with smaller acquisitions and boost its Internet business after the failure of its bid for Yahoo! Inc. earlier this year.
Microsoft will need to expend at least $1.2 billion yearly to match Google’s research and development including additional funds for marketing, Chief Executive Officer Steve Ballmer said last month. In recent months, the company has focused on improving its sites for searches that lead to shopping and travel.
In a related deal, Microsoft has secured a buyer for Greenfield Online’s Internet Survey Solutions, a business that has been the cornerstone of Greenfield Online since 2001.
Both transactions are expected to close during the fourth quarter of 2008. Upon close of the agreement, the Ciao business will report to Rajat Taneja, general manager for worldwide commercial search at Microsoft.