Microsoft, the US software giant, today stepped up its campaign to steal internet market share from Google by agreeing a $486 million (£265.6 million) takeover of Greenfield Online, the Nasdaq-listed web research company.

Greenfield, which operates in the UK and Europe as Ciao! Surveys, questions users about their online habits, providing a valuable database about surfers' activities that will help Microsoft to target advertising at the right customers. The company also operates a number of price comparison sites.

The $17.50 a share cash bid for Greenfield is the latest salvo in Microsoft's battle with Google to capture more of the global online advertising market which is estimated to be worth $40 billion a year and is forecast to double in value by 2010.

Earlier this week, it emerged that Internet Explorer 8, Microsoft's latest internet browser, includes a privacy setting that hides the audit trail of websites surfers have visited.

The "InPrivate" feature means Microsoft can prevent other internet sites from collecting information about users which is then used to target advertising at surfers.

Google holds the lion's share of the global online advertising market, followed by Yahoo! and Microsoft.

Earlier this year, Microsoft attempted to usurp Google by acquiring Yahoo! for $47.5 billion but was ultimately rejected. Google attempted to ramp up targeted advertising this year when it acquired DoubleClick for $3.1 billion.

Greenfield was previously in takeover discussions with Quadrangle Group and had secured an agreement with the private equity group. Greenfield will now pay a $5 million break fee to Quadrangle.

As part of the deal, Microsoft will sell off Greenfield Online's internet survey solutions business to an "unnamed financial buyer".

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