Redmond, WA: CSE Capital of the World

Microsoft announced recently that the $486 million acquisition of Greenfield Online, owner of the Ciao family comparison shopping sites. Ciao just launched in the US this year, but has been at the top of the heap in the German CSE market for some time. MSN will sell off the online survey piece of the business and retain only the Ciao properties, and apparently plans to wrap the consumer incentive function of Microsoft Live CashBack function (based on technology from their acquisition of Jellyfish.com) into the Ciao sites.

This seems like a reasonable plan to acquire users and revenue in Europe, but What does this means for the US market? MSN, who already owns MSN Shopping, MSN Live Product Search, and the aforementioned MSN Live CashBack, now has a fourth CSE property in the US. One can only think (and hope) that there is some consolidation/integration going on behind the scenes since they currently each require a separate feed. Throwing Ciao into that integration process makes for a lot of work. This work may pay off in EU where Ciao is already known, but it seems like in the US, keeping Ciao.com afloat may be more trouble than it is worth. It's another brand to build at a time when MSN should be focusing on their own brand's competition with Google. CSE's that have little brand recognition, such as Ciao in the US, are predominantly driven by marketing efforts. The efforts on Ciao's part have, so far, not had much impact in the US market, even with the "social" aspect helping them out. Those marketing dollars would be better spent in the US on something other than Ciao.com. MSN's ability to focus may be tested here.

Comments

[Nicolas]

"apparently plans to wrap the consumer incentive function of Microsoft Live CashBack function (based on technology from their acquisition of Jellyfish.com) into the Ciao sites."

The press release suggests the Ciao technology will be integrated into Live Search; rather than the opposite...

With that assumption in mind, it may be interesting to replace the existing Windows Live Search Products (a US-only product) by CIAO technology, leveraging social aspects of CIAO into Windows Live Search.

As Ciao is available in the US and several EU countries, that means they have an internationalized platform... which would make the Windows Live Search Products a global product.

But indeed, as you mention: "Throwing Ciao into that integration process makes for a lot of work."

Nicolas

[Mark]

Hi Nicolas:

I couldn't get the press release to load but was making comments based on this piece of the reuters article:

"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."

I thought that may mean they were going to integrate the cashback function into Ciao, but you are correct in that they may a reference to to the UK Cashback announcement made in June.

[Amrendra]

The aquisition definitely indicates something promising for the msn user.