Microsoft Buys Jellyfish.Com
October 10th, 2007 Posted in NewsInternet giant Microsoft continues to grow bigger and bigger. In an attempt to keep its hold on the online advertising industry despite serious threats from Google to outrank Microsoft, the company is not letting up on attempt to expand and diversify its online services. Just recently, the company has bought Jellyfish.com, a website that enables users to compare prices of products from different online retailers and is popular for its deals with Best Buy and Target Ad as well as other large online retailers.
These online retailers which partner with Jellyfish.com pay a certain fee for the promotion of its products and in exchange, it refunds part of its revenues to customer which makes the transaction through the website. The same website also has an online auction feature which continues to lower the prices of certain products until they are out of stock. Although the deal to buy Jellyfish.com was closed on September 27, 2007, Microsoft waited until October 2 to announce the deal but it has yet to disclose the financial details of the transaction. In an interview with Business Week, Microsoft CEO Steve Ballmer explained that the about 25% of the company’s revenue would be coming from advertising within the next four to ten years to give all media and advertising outfits enough time to go online.
This recent expansion move is an attempt by Microsoft to gain some of the audience and advertisers that are fixated on Google, its main rival that claims more than half of online searchers and over a quarter of online advertising revenues. Using its already bulky resources, Microsoft has recently bought aQuantitive, one of its biggest buy in the online advertising market. However, despite all these efforts, online advertising accounts for a mere fractional 5% of the $51.1 billion revenues that Microsoft earned last fiscal year.
With the recent purchase of Jellyfish.com, the auction and rebate features of the website would eventually be integrated into the MSN online properties website. Brian Weigand, founder of Jellyfish said in Business Week, “They are investing heavily in shopping and e-commerce.” Before selling Jellyfish.com, Weigand created and sold NameProtect and BizFilings adding that he will be staying with this new partnership, “I’m going to give being an entrepreneur within a big company a shot. Microsoft is trying to become more entrepreneurial.”
Aside from its rebate and commission to refund features being offered by Jellyfish.com, the website also has a daily auction called Smack Shopping. In a smack or a group of Jellyfish users, prices of certain products can be lowered until the stock runs out. This feature alone allowed the website to gain $5 million in annual profits.
But the recent purchase of Jellyfish.com is not the last attempt by Microsoft to buy more other companies that would help solidify its advantage over other competitors. By building up its online advertising services, the said Internet giant will maintain its grip on the growing online market and remaining at the top of the class.
