Microsoft Live Search Cashback Analysis

Rich Tehrani : Communications and Technology Blog -
Rich Tehrani
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Microsoft Live Search Cashback Analysis

Would you switch your search engine if you got paid to do so? Amazon tried this recently with their A9 search engine and countless dotcoms did as well with chances to win millions if you used them. No one seems to have ever been successful so far using this approach.

Microsoft has pretty much given up on beating Google with a better search engine since no matter how much money they have thrown at this market, Google keeps gaining share. Instead, they will now pay you to use their search engine by offering money back on select purchases. TechCrunch has some great analysis of the situation.

Will Microsoft do better at this game than others? I am not sure. I remember trying to use Amazon's search engine to see what sort of savings Amazon would give me on purchases but I instinctively reverted back to Google after a few searches.

The way the Microsoft system works is, you enter in what you are looking for and possibly some of the sponsored links will say say "Live Search cashback" on them. Click on one of these links and you will be presented with cashback amounts of various sizes. I saw a high of 5% which at J&R Computer and Music World equated to $17.45 back for an iPod Touch.

I noticed too that Bose products had cashback associated with them at Crutchfield. The interesting thing to me is that generally Apple and Bose products aren't discounted so if you are looking to buy either, you would be pretty stupid not to use Microsoft's Live Search.

As Arrington points out at TechCrunch, Microsoft has almost nothing to lose here as they have a small amount of search revenue and this move is a stake in the heart of Google's revenue model. Google spends a tremendous amount of money "organizing the world's information" as they say but they pay for most of this effort with advertising revenue generated by ecommerce.

If this move by Microsoft gets people to  use Microsoft Live Search for ecommerce searches alone, it will hurt Google and reduce revenue.

Many people spend countless hours online comparing sites to get the best prices on their purchases. It is a no-brainer for these shoppers, looking for the best deal -- to go to Microsoft's search engine as part of the process of shopping. None of this is good for Google but I would think it would take years for the search leader to see major impact from such a move and in the end, Microsoft has shareholders who eventually have to start asking about when the search division will generate revenue.

The author owns share in Google.

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