“It seems that Google is not the only one to find out there is big money in search; and now consumers will start getting some greenbacks too from Microsoft, its arch rival.”
San Francisco — With its portion of the Internet search market declining steadily and its pursuit of an alliance with Yahoo dangling in doubts, Microsoft in its latest attempt to compete with Google in the internet search market is taking a new approach with the launch of a program called Live Search cashback that pays cash rebates to customers who find and buy products using the software giant’s search service.
The cashback announcement was conveyed by outgoing Microsoft chairman Bill Gates at advance08, Microsoft’s annual advertising customer event. “Our goal is to make Live Search the most rewarding commercial search destination on the Web,” Gates said in a statement on the launch. “Live Search cashback will help advertisers drive more online sales while giving consumers a new way to stretch their dollars.”
Microsoft executives said the launch of the new service, called Live Search cashback; is part of a plan to come up with new approaches to attract more people to its internet search business where they see opportunities to make inroads against Google, the market leader.
The new program centers upon searches for products to be bought online, which Microsoft executives said account for roughly a third of search queries and a majority of search advertising revenue.
“This is quite a big part of the $20 billion search market,” Microsoft’s Gates said. “Make no mistake; we are about having the best search, having the best results.”
Some innovations in the business model of search, like Live Search cashback, “will help drive that,” he added.
The savings vary between 2% to 30% on products sold by select retailers through its so called cashback service. Microsoft’s new site is perceived as an attempt to convince advertisers it can combat Google’s increasing share of the online ad market.
“2008 is the year that search got competitive,” Gates said.
Microsoft maintained that the ad-funded cashback program covers over 10 million products from over 700 merchants online. Some of the bigger names in the online retail partners in the program include eBay, Barnes & Noble.com, Overstock.com, Sears and Zappos.com, promising to offer customers “ad-funded cash rebates”.
Under the Live Search “cashback” program, shoppers using Microsoft’s Internet search service will have percentages of purchases refunded.
A Microsoft spokesman termed the rebate as the commission paid to Microsoft each time by the participating merchants when customers purchase an item from a merchant via Live Search cashback, although it refused to reveal what percentage of the retail price this will be.
“We believe search can offer much more value to consumers and advertisers than it does today,” Gates said in a release.
Addressing the company’s annual digital ad conference in Redmond, the company chairman presented details of their latest product and told the audience to expect “big announcements around search to happen every six months”.
“The tremendously positive response from all the partners confirms there is this opportunity for change,” Gates said in his keynote speech at the end of the two-day summit.
To make use of the service, customers will be required to provide personal details, such as billing information, Microsoft then pays the customers directly via a choice of a check, bank account deposit, or eBay’s PayPal service and consumers can claim payment once their account has reached a balance of at least $5.
Microsoft said it intends to make Live Search the top search engine for the growing category of search queries that help consumers carry out research and purchase goods or services. A parallel objective, of course, is to help merchants drive online sales of their products.
Sir Martin Sorrell, chief executive of the advertising giant WPP, whose company is one of Microsoft’s partners for the new service, said: “Our business is to connect consumers with brands in the most effective and efficient ways. Microsoft’s Live Search cashback creates a real incentive for consumers to connect with our clients.”
According to industry information, online retail in the United States is projected to grow to $335 billion by 2010. Today, 68 per cent of all those retail transactions begin at a search engine.
Although the service will be available in the United States, sources close to the company said that it would be introduced to countries such as Britain if it proved a success.
The technology is built on a system used by Jellyfish, the shopping and auction service, which Microsoft acquired in September 2007.
Separately, Microsoft also announced a new site called Live Search Farecast, designed to help consumers find the best travel deals online. Microsoft acquired startup Farecast last month.