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.
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Microsoft is paying $US486 million ($564 million) for Ciao's US parent company, Greenfield Online, in a deal that values Greenfield's Nasdaq-listed shares at $US17.50.
The acquisition comes three months after a Microsoft attempt to pay $US47.5 billion for online portal Yahoo fell apart. Microsoft chief executive Steve Ballmer recently reorganised the software group's online division and pledged to invest $US1.2 billion 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.
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.
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 we believe will deliver incremental benefit to the Microsoft Live Search platform."
Once the acquisition is complete, Microsoft will sell 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 $US5 million 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 recently launched an application allowing Facebook users to recommend products to friends.
