Microsoft Corp. announced its seventh acquisition of the year Tuesday, disclosing that it is buying online shopping site Jellyfish.com.
Terms of the deal were not disclosed. One of Jellyfish's financial backers, Fitchburg, Wis., venture capital firm Kegonsa Partners said it made 15 times its initial investment in the company, while second-round investor Clyde Investments LLC made roughly twice its investment, said Kegonsa partner Ken Johnson. He would not disclose the firms' total investments in Middleton, Wis.-based Jellyfish, which did not return a call requesting comment.
"They were approached by other large companies in the space--Microsoft was not the only one," he said, while noting that Jellyfish was not seeking a buyer, but received unsolicited interest from several potential acquirers. "We had plenty of money in the bank, substantial money in the till to operate for some time."
Johnson said his firm's investors made a monthly return of more than 15% and an annualized return of 550% on the company, which was not yet profitable.
Jellyfish, which generates revenue from each transaction completed on its site, had raised $5 million in funding in October from Kegonsa and Clyde Investments. It had raised an earlier undisclosed round of funding in March 2006 from Kegonsa, company management and angel investors.
Jellyish's site enables users to compare prices of items and chat with other shoppers. "We think the technology has some really interesting potential applications as we continue to invest heavily in shopping and commerce as the key vertical for Live Search," said Alex Gounares, corporate vice president of Microsoft's search and advertising platform group, in a statement.
Microsoft has made a handful of acquisitions this year. In August the software giant completed a $6 billion purchase of online advertising firm aQuantive Inc. In July Microsoft bought advertising exchange company AdECN Inc. for an undisclosed sum, while in May the company took a 4% stake in online job search firm CareerBuilder.com, snagged mobile phone advertising firm ScreenTonic SA for an undisclosed amount and completed its purchase of Tellme Networks Inc., a provider of speech recognition technology, for about $800 million.
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