- guardian.co.uk, Saturday August 30 2008 00.01 BST
- The Guardian, Saturday August 30 2008
One of Europe's most popular price comparison websites, Ciao, has been snapped up by Microsoft as the Seattle-based software empire seeks to challenge the online dominance of Google.
Microsoft is paying $486m (£266m) for Ciao's US-based parent company, Greenfield Online, which values Greenfield's Nasdaq-listed shares at $17.50.
The acquisition comes three months after Microsoft's $47.5bn effort to buy online portal Yahoo fell apart. Microsoft's chief executive, Steve Ballmer, recently reorganised the software group's online division and pledged to invest $1.2bn annually in internet activities to keep up with Google.
Ciao was founded in Germany nine years ago by two entrepreneurs, Max Cartellieri and Fred Paul. It was taken over by Greenfield in 2005 for $154m and the two co-founders subsequently left.
Ciao provides a forum where shoppers can compare or review products, attracting 26.5 million visitors a month. The service will be incorporated into MSN's website in an apparent direct challenge to Google's money-saving tool, Froogle.
Tami Reller, Microsoft's vice-president for Windows and online services, said: "The team at Ciao has built a passionate consumer community based on intuitive technology and extensive merchant relationships that we believe will deliver incremental benefit to the Microsoft Live Search platform."
Once the acquisition is complete, Microsoft will sell on Greenfield's additional operations in online data collection for research and marketing companies. Microsoft is gazumping a private equity company, Quadrangle, which had agreed to buy Greenfield and which will receive a $5m break fee.
Based in Munich, Ciao makes money by directing shoppers to recommended vendors who pay the website a commission for every sale. It operates in seven countries and it recently launched a new application allowing Facebook users to recommend products to friends.
