Finally, Microsoft decided to move itself quickly in order to close the gap with Google. They have released the overhauled version of search engine, with main emphasis on vertical search. And today, they acquired an e-commerce search engine, Jellyfish for an undisclosed sum. Jellyfish was created with a little more than an excellent business concept and an experienced founding team. It was based in Wisconsin and previously raised $5 million in a round A financing led by Kegonsa Capital Partners and Clyde Street Investments. Founded in January 2006 with a principle of “we share,” this startup was capable to establish itself by sharing with its customer at least half of all revenue derived from sales through the Jellyfish site. The adoption of 100% cost-per-action model, albeit that sometimes mistaken as a cash back-focused affiliate marketing strategy, successfully create more tangible value by form of rebates to the Jellyfish customers. Google followed a similar strategy in this year by opening “pay-per-action” advertising opportunities within their AdSense network.

Clearly, Jellyfish’s business model attracted to the big players. By using Jellyfish, customers can browse and compare prices of products from the member stores listed in Jellyfish. Moreover, Jellyfish offered an unique form of auctions in which the prices of certain products get progressively lower until someone buy those items. The longer potential customers wait to buy, the deeper the discount. This trademarked smack shopping is their core marketing strategy that designed to drive more traffic to the main shopping site. However, at the end of the day, Jellyfish learned that they had to find ways to attract more visitors. I don’t know how Microsoft going to integrate this shopping engine into their existing Windows Live platform, but Jellyfish’s technology certainly fill the Microsoft’s product gap and able to transform Microsoft to a better online shopping player.