SAN FRANCISCO (AFP) - The battle for terrain in the lucrative Internet search market continued on Tuesday with Microsoft revealing it has bought Jellyfish, a US firm specializing in comparison shopping online.

"We purchased Jellyfish.com," Microsoft search and advertising platform group vice president Alex Gounares said in a written reply to an AFP inquiry.

"We think the technology has some really interesting potential applications as we continue to invest heavily in shopping/commerce as a key vertical for Live Search."

Live Search is Microsoft's free Internet search service that has been mired in third place behind Google and Yahoo when it comes to popularity.

Gounares described Wisconsin-based Jellyfish.com as a shopping search engine that enables customers to compare prices and vendors before buying online.

Jellyfish.com offers shoppers money back for purchases made through the website and has a feature called "smack shopping" in which the prices for items offered for sale drop incrementally until someone buys them.