Representatives from Microsoft Corporation and FireFly Network Inc. confirmed on Thursday that the Redmond software giant would be purchasing the small Internet startup. Microsoft says that it pursued FireFly to gain access to its Internet personalization software and assume FireFly's role as an advocate of Internet privacy.

"I think for a period of time, \[FireFly's personalization software\] will be a differentiator. But that is not a long-term goal," said Ed Graczyk, lead product manager for the Web Essentials Group at Microsoft. "The goal is to make \[FireFly's privacy standards efforts\] as broadly available as possible."

Though no one is releasing a firm figure, reports are that Microsoft paid $40 million for FireFly, and it will hire FireFly's management team and much of its other employees.

"It was just an opportunity that we could not refuse," said Firefly founder and CEO Nicholas Grouf