Microsoft buys European shopping site Ciao for $486M

Microsoft had to outbid a private equity fund, Quadrangle Group, to win this deal for Ciao's parent company, Greenfield Online. In June, Greenfield entered what it described at the time as a definitive agreement to be acquired by Quadrangle for $426 million. Even though Greenfield ditched Quadrangle Group for Microsoft, don't feel too sorry for Quadrangle. Greenfield must pay the consortium a sweet $5 million fee to extricate itself from that agreement.

Microsoft will not keep one unit of the Greenfield Online operations -- its survey business. Ciao pays Internet users for taking surveys. Microsoft expects to sell that business to an unnamed buyer.

One interesting note, Yahoo too has acquired a European shopping comparison service, French company Kelkoo, which operates in ten European countries.

Comparison shopping services as destination sites, such as Shopping.com, were all the rage in the U.S. in the early 1990's when e-commerce first hit the scene. Shopping.com is still around, and operates in Europe, too. But most U.S. buyers tend to do their comparison shopping on eBay or their favorite search engine (one whose name starts with a "G" and rhymes with bugle). But with a single currency across Europe, shopping services in that part of the world make a lot of sense. Any chip Microsoft can get that game would serve it well.

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