Private Equity Firm Snaps Up Greenfield Survey Arm

Microsoft has revealed that it is selling the Greenfield Online Internet Survey Solutions (ISS) business to ZM Surveys, a 'shell' organization affiliated with media-focused private equity firm ZM Capital. Terms were not disclosed.

ZM Capital is a fund family of ZelnickMedia; a partnership which owns interests in an array of media enterprises, including consumer research agency OTX (Online Testing eXchange).

The news comes less than a fortnight after Microsoft announced it would acquire Greenfield in a $486m deal, along with its intention to sell Greenfield's online survey arm. Microsoft will keep the Ciao comparison shopping web sites to enable it to focus on its commercial search strategy in Europe.

'We believe that Microsoft's decision to sell Greenfield Online's ISS business to ZM Capital is an excellent opportunity to strengthen our industry leadership around the world,' said Albert Angrisani, President and CEO of Greenfield Online. 'I believe the team at ZM Capital has the right combination of domain experience and resources to help the ISS business develop the next generation of products and services.'

This is the first portfolio investment made by ZM Capital, which says it plans to keep the Greenfield Online ISS business as a stand-alone, independent, privately held company.

Partner Andrew Vogel confirmed that his company has no current plans to integrate or merge ISS with any other firm. In addition, Vogel told DRNO that ZM Capital intends to retain Greenfield Online's senior management team, which he described as 'an attractive part of the acquisition'. ZM also plans to maintain Greenfield Online's current branding.

While the Greenfield Online team was generally giving little away today on future plans for the company, EVP Keith Price said that Asia continued to offer an area of 'exciting growth'. Price was unable to comment on the recent decline experienced in the ISS business, which dropped 3% in Q1 while the Ciao comparison shopping business grew 60.3%.

The merger of Greenfield Online and Microsoft, and Microsoft's sale of the ISS business are expected to close simultaneously in the fourth quarter of 2008.

Web sites: www.microsoft.com and www.greenfield.com .