Microsoft has reached an agreement to acquire Greenfield Online, owner of Ciao GmbH, one of Europe's larger price comparison, shopping and consumer reviews sites.

Under the terms of the agreement, Microsoft will commence a cash tender offer to purchase all of the outstanding shares of Greenfield Online for $17.50 per share in a transaction valued at approximately $486m.

Ciao currently has more than 26.5 million unique visitors per month across seven countries. The acquisition signals a significant investment by Microsoft in European web businesses.

Microsoft's search strategy is based on its own Live Search platform and the software company recently acquired Multimap and opened a European Search Technology Centre.

"This makes the company a fantastic asset to the future of our search offer. Integrating Ciao's capabilities into Live Search will provide a strong launchpad for our commercial search offer in Europe and enhance our e-commerce offering on MSN," said John Mangelaars, vice president, Consumer and Online, Microsoft Europe, Middle East and Africa.