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Microsoft Corp. hopes to make gains on Google Inc. in the lucrative business of Internet search through a new service that pays consumers who buy items they find through the software company's search service, according to people familiar with the company's plan.
The Redmond, Wash., software maker is rolling out a service called "Live Search cashback" that gives consumers money back on certain purchase of products found through Microsoft's live.com Web search service, the people said.
Live Search Cashback [online.wsj.com]
Live pages are available at [search.live.com...]
Definitely an interesting idea - internet users love free stuff, right?
[edited by: engine at 1:05 pm (utc) on May 21, 2008]
[edit reason] added WSJ link [/edit]
Microsoft To Offer Cash Back To Search Engine Users In Effort To Fight Google
[edited by: engine at 1:45 pm (utc) on May 21, 2008]
[edit reason] merged thread [/edit]
Search for Cash Back Deals at Live Search Cashback. Each time you click a Live Search cashback listing, you'll find great deals on the product you chose.
Hmmm, a new twist on Price Comparison? Yup, that's what it appears to be. Each time you purchase, you'll earn a small percentage of cash. Once you reach $5.00, you can claim your earnings. :)
Unfortunately, it won't replace accurate and trustworthy SERP's
"Microsoft said that 700 merchants offering more than 10 million products have agreed to participate in the program..."
Historically there is one thing MS does well -- they make money. So there must be an income generating plan behind this latest scheme, and that's the overriding priority. This does not sound like a company that is willing to do what it takes to develop a world class search service, rather, it sounds like a company that has reached the point where it will try anything to compete against a competitor that DOES have a world class search engine, and is beating them senseless.
When MS wants something bad enough they have the money to follow through. I wouldn't count them out...lots of typical MS users will likely switch into this program creating a decent sized market. Think it's a solid strategy for Microsoft to expand their services. Have a look at their new C-dragon technology... MS is actually coming out with some cool stuff lately
"It's a bold move that goes for Google's throat, and it will likely have a material impact on their search market share.
The key takeaway: Google's search dominance is growing, and everything Microsoft has historically thrown at them has done nothing to slow them down. This new approach is both desperate and brilliant. Desperate because Microsoft is giving away most of the search revenue to get market share gains. Brilliant because they have such a small share of search revenue today that they have little to lose, and they are hitting Google hard in their core business."
Rest of story [washingtonpost.com]
[edited by: Reno at 1:09 pm (utc) on May 22, 2008]
It seems to be a race to the bottom. First cashback sites gave a percentage of affiliate revenues back to end-customers, then it was 100% of affiliate revenues, then it was 100% of affiliate revenues plus a portion of the sales incentives the cashback sites were awarded for putting through such a large volume of qualified traffic, now it's 100% of affiliate revenues plus 100% of the sales incentives.
And what's next? All of the above plus CPM advertising revenues as well? And then? How desperate will competing cashback sites get to keep clawing on to market share?
And at the same time as competition gets tougher and more numerous and profit margins get thinner for the cashback sites, there is a serious problem on the horizon.
The beauty of CPA is that it is win-win-win: a win for the publisher, a win for the network and a win for the merchant which gets a sale it wouldn't otherwise have got.
Cashback is oftentimes win-win-lose. Because end-customers who were going to buy something anyway deliberately seek out a cashback site to buy it through. The merchant ends up with the same number of unit sales but finds itself paying commission on a lot more of them.
I think cashback was doomed the moment more than three people thought it was a good idea. The fact that a leviathan such as MSN has now rumbled into the marketplace signals (I hope) the final death-throes of this cleverly thought up, but ultimately limited-shelf-life business model.
I really hope that cashback eats itself as quickly as possible.
After all, if it should happen that the company continues to lose market share even when they are willing to pay people to use their service, what can they do next to make a genuine difference?
Possible answer: Do whatever it takes and spend whatever is required to build the world's best search engine, on the assumption that people really will gravitate to quality.
Now there's a radical idea ;)