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The website lets users compare prices of goods from retailers who pay it fees to promote their products. A share of that revenue is passed on to users who buy from the site, effectively making the goods cheaper.

Jellyfish also runs back-to-front auctions, where goods become cheaper until the supply runs out.

Microsoft

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has not revealed the terms of the acquisition, which was closed last week. Its public utterings on the deal are confined to a blog post that note that "the technology has some interesting potential applications as we continue to invest heavily in shopping and commerce as a key component ofLive Search".

CEO Steve Ballmer said this week that he expects a quarter of the company's revenue to come from advertising within 10 years and the purchase of Jellyfish coincides with the unveiling of an online version of Office and a retooled Web search. All three operate in areas where market leader Google is well, and lucratively, established.