Microsoft Acquires Shopping Site Jellyfish

By Ed Oswald, BetaNews

October 2, 2007, 10:55 AM

Microsoft said Tuesday that it had acquired comparison shopping site Jellyfish, which allows users to compare and buy products, and then get cash back for purchases made through the site.

The site will remain separate from other products by Microsoft, but act as a wholly-owned subsidiary of the Redmond company. Terms of the deal, which was struck on Thursday, were not immediately disclosed.

"We think the technology has some interesting potential applications as we continue to invest heavily in shopping and commerce as a key component of Live Search," Microsoft's Search and Advertising head Alex Gounares said in a statement.

Jellyfish, which employs 26, will stay in its Madison, Wis. location, although will likely report to Gounares. CEO Brian Wiegand told the Wisconsin State Journal that he was extremely happy with the deal and that "it's a huge win for Jellyfish and the state of Wisconsin."

The site allows users to get cash-back on purchases made through it by sharing a portion of its advertising revenue. Advertisers choose the level of commission they will give to the site, half of which is given back to the consumer.

Another area, called "smack" shopping features products with constantly falling prices. Users can wait for a low price, but they may miss out as Jellyfish does not list how many are available at any given time. In about a year of operation, the site has had about $5 million in sales, and lists some five million products.