Microsoft Buys European Shopping Site For $486M

August 31, 2008 9:11 a.m. EST

Redmond, WA (AHN) - Microsoft has agreed to buy Greenfield Online, the parent company of European shopping website Ciao.com, for $486 million.

The deal is seen to expand Microsoft's presence in the European online search market. Greenfield Online help consumers find product reviews as well as compare prices.

Greenfield shareholders will receive $17.50 a share in cash.

Quadrangle, which offered to buy Greenfield for $15.50 in an earlier bid, backed out of the deal in favor of Microsoft.

The Financial Times reported that the acquisition will be Microsoft's largest since it abandoned a bid for Yahoo. Yahoo owns Kelkoo, another large shopping site.

Once the purchase is completed, Microsoft plans to spinoff and sell Greenfield's online research business.

Microsoft holds about nine percent of the online search market in the United States. In Europe, its share is only at 1.8 percent as of July compared to the 79.1 percent of Google, according to internet research group ComScore.

Ciao.com is the leading comparison shopping site in Europe with 19.6 million visitors as of July.