The Purchase of Ciao by Microsoft

Today, news released that Microsoft buys European comparison shopping site, Ciao, for $486M.

Based in Munich, Germany, Ciao operates consumer review and comparison shopping portals in France, Germany, Italy, the Netherlands, Spain, Sweden and the U.K.

In June, Greenfield made a definitive agreement to be acquired by Quadrangle for $426 million, and must now pay the consortium a $5 million fee to terminate that agreement.

Microsoft plans that the Ciao business will report to Rajat Taneja, general manager for worldwide commercial search at Microsoft.

There are several reason makes Microsoft in this move.

The major motivation was compete with Google and Yahoo on search market share. Earlier this year, Microsoft pucrhased Jellyfish.com for cashback service. The acquisition of Ciao and its established user base may allow Microsoft to extend that approach to Europe.

Yahoo has already acquired a French comparison shopping service, Kelkoo, which now operates in ten European countries, and also drives Yahoo's own-brand comparison shopping service in France, Germany, Italy, Spain, the U.K. -- and Taiwan.