Microsoft buys Greenfield Online for $486 million

Microsoft Corp., the worldÔÇÖs largest software maker, agreed to buy Greenfield Online Inc. for $486 million in a move that will strengthen its search and e-commerce services in Europe. ┬á The acquisition will boost Microsoft into the European market for shopping comparison Web sites that sell computers, cameras and other retail products. ┬á MicrosoftÔÇÖs failed bid for Yahoo! Inc. earlier this year left the software giant searching for ways to catch Google Inc. and boost its Internet business. CEO Steve Ballmer reported last month that the company will need to fund at least $1.2 billion annually to compete with GoogleÔÇÖs research and development, plus additional spending for More News marketing. ┬á Greenfield, which reported net income of $2 million in the second quarter on sales of $36 million, runs a popular Web site called Ciao for people to review products sold through merchants and compare prices. The merchants pay Greenfield a commission when people buy products from the site. ┬á Ciao gets 26.5 million visitors a month through its operations in the UK, Germany, France, Italy, Spain, and Sweden, and has signed 2,200 merchants. ┬á Purchasing Greenfield is a quick way for Microsoft to enter EuropeÔÇÖs product and price-comparison market, said Tami Reller, CFO for Windows and Online services at Microsoft. The company plans to incorporate Ciao into its current holiday site, travel.msn.com, to increase the number of total transactions. ┬á Microsoft says its current Web sites have 150 million users in Europe, the Middle East and Africa, and plans to further the number of users through rebates that will pass on part of the commission it gets from merchants to consumers.┬á Microsoft announced that it will set a similar plan in the US in May for people who buy products through its search service.