Microsoft tries to catch Google with Multimap

Microsoft has continued its high-profile acquisition spree by snapping up the UK online mapping company Multimap. The deal is likely to have produced a further windfall for its founder and majority shareholder, Sean Phelan.

Phelan, who set up Multimap in 1996, held 50% of the company and had reportedly already raised almost £1.9m from the sale of a 25% stake to investors three years after the launch.

Microsoft aims to marry the company's location and mapping technology with its own digital products and services. It said Multimap would complement Virtual Earth, Live Search, Windows Live services, MSN and its new $6.5bn (£3.2bn) acquisition aQuantive, the online marketing group.

The acquisition of Multimap is an attempt to compete with Google, whose Google Maps and Earth dominate the online mapping and location market.

Data from the measurement firm Nielsen Online shows Google Maps has a 21.4% reach among the world's web users, compared with 1.4% for Multimap.

Google Maps recorded an estimated 71.5 million unique users during October and Google Earth, which offers satellite images as well as road maps, logged 22.7 million users.

Microsoft's Windows Live Maps had 7.1 million unique users in October. Multimap had 1.4 million unique users, according to Nielsen, also behind rivals MapQuest, ViaMichelin, Mappy and Map24.

Sharon Baylay, general manager of Microsoft's online services, said: "This acquisition will play a significant role in the future growth of our search business and presents a huge opportunity to expand our platform business beyond the UK and globally." Microsoft also said there was "future integration potential" for Multimap across its businesses.

Jeff Kelisky, Multimap's chief executive, said: "Partnering with Microsoft gives us a world of new opportunities to build our mapping services into new technologies and applications."

Multimap will operate as a wholly owned subsidiary of Microsoft, which did not disclose the price of the acquisition.

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