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Microsoft, whose $47.5 billion bid to buy Yahoo earlier this year failed after a protracted battle, said on Friday the acquisition should benefit its Live Search platform.
Internet search is dominated by Google, which has 62 percent of the global search market and 79 percent in Europe, according to the most recent data published by 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.
"The team at Ciao has built a passionate consumer community based on intuitive technology and extensive merchant relationships that we believe will deliver incremental benefit to the Microsoft Live Search platform," said Microsoft's vice president for Windows and online services, Tami Reller.
Ciao.com offers advice on purchases, mainly of consumer electronics, and encourages users to join a network of shopping experts to share opinions. It makes its revenues from e-commerce, merchant referrals and advertising sales.
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.
On Aug. 26, Greenfield had said it had received a $17.50 per share offer but did not reveal from whom. The latest offer represents a premium of about 10 percent over Greenfield's closing share price on Aug. 25.
Microsoft said it had agreed to sell off Greenfield Online's main business, which surveys consumer opinion online and sells the results to market researchers, to an unnamed financial buyer.
The companies expect both deals to close during the fourth quarter of 2008. Completion of the Greenfield sale to Microsoft does not depend on Microsoft's disposal of the online survey business, the two companies said.
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