By Georgina Prodhan
"We call it 'instant answers'," said John Mangelaars, head
of Microsoft's consumer and online business in Europe. "I hope
it's getting very clear that we've very serious about EMEA," he
added, speaking to Reuters by telephone.
Internet search is dominated by Google, which has 62
percent of the global search market and 79 percent in Europe,
according to Web usage tracker ComScore.
Microsoft has a 2 percent market share in Europe and 9
percent worldwide, behind both Google and Yahoo. In Europe,
Microsoft is also outranked by online auction site eBay and
Russia's Yandex.
But Mangelaars said buying ciao was an important step
in Microsoft's attempt to distinguish itself by providing
search results more useful to consumers, particularly shoppers,
than those thrown up by a Google search.
For example, results of a Microsoft search for a particular
camera model could include which prices were available from
which retailers, and maps of where those retailers were, rather
than just links to the manufacturer's and retailers' websites.
The acquisition follows those of Norwegian enterprise
search company Fast for about $1.2 billion early this year and
shopping-and-auction site jellyfish for an undisclosed sum
last year.
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Caio is active in seven European countries and attracts
19.6 million unique visitors per month in Europe, more than
twice as many as rival kelkoo, according to ComScore,
thanks to its large network of members who contribute product
reviews.
To attract more users, Microsoft also plans to reward
consumers who buy products through its shopping sites by giving
them cash back, extending a trial started in the United States
a few months ago.
"Google's trying to do all your search needs. What
Microsoft is doing with this kind of acquisition is saying:
'We're going to be very good at the commercial side of search,
the shopping'," said Forrester principal analyst Rebecca
Jennings.
Herve le Jouan, ComScore's managing director, Europe,
agreed. "Doing this shopping thing, I think, is a good move,"
he said, but cautioned that acquisitions alone would never
bring Microsoft close to Google's market share in search.
"Nobody is able to compete right now with Google so there
is nobody to buy to compete with Google," he said.
Microsoft's Mangelaars acknowledged the distance Microsoft
had to cover, especially given the commercial edifice rapidly
being built by online advertisers whose models depend on
Google's particular view of the Web.
"It's a race," he said, "but we also believe it's very
early days in search technology."
Microsoft's offer of $17.50 per share betters an earlier
proposal by media-focused U.S. buyout firm Quadrangle Group to
acquire the company for $15.50 a share, and represents a slight
premium to Greenfield's closing price of $17.25 on Thursday.
(Additional reporting by Saumyadeb Chakrabarty in
Bangalore; Editing by Quentin Bryar and Sue Thomas)
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