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May 21, 2008

NEWS: Microsoft looks to buy way into search (With CPA Model)

Ed: Microsoft has activated a plan for CPA (Cost Per Action) advertising. Advertisers pay based on transactions, while consumers gain cash back like a coupon. Thus, Microsoft plays in the space between brand advertising and transactional commerce like eBay, Amazon, or Yahoo Shopping. 

The new model gives Microsoft more marketing weapons when working with large advertisers. 

Implications of CPA on search, SEM, and Yahoo are minimal. 
  • SEM appeals primarily to millions of smaller advertisers. 
  • Search is broader than a handful of promotional products. 
  • The Yahoo acquisition/deal builds critical mass. 
Let's stay focused, bloggers.

Microsoft looks to buy way into search (again)

REDMOND, Wash.--Microsoft is looking to buy its way into search, and I'm not talking about Yahoo.

The software maker plans on Wednesday to launch a cash back program to those who buy things after using its search.

Microsoft has details of the program up on its Web site, including a list of frequently asked questions.

"We want to earn your loyalty and reward it with cashback savings for your everyday online shopping," Microsoft said. "We are 'The Search That Pays You Back!' "

As previously reported, Microsoft is due to show off its latest enhancements to its search product at the Advance 08 advertising conference here. Microsoft Chairman Bill Gates is set to offer the main address of the event on Wednesday. I hear the company has more than just the cash back effort up its sleeves.

In any case, it's not the first time Microsoft has tried to use financial incentives to boost its search share. It has run a number of programs including its Live Search Club that offer rewards for those that use its search.

The Live Search Club effort briefly boosted Microsoft's search market share last year, but the gains have proved short lived. Microsoft has been losing ground since then and has returned to a single digit share of the market.

The news was reported earlier Tuesday by Search Engine Watch and the Seattle Post-Intelligencer.

According to the reports, Live Search Cash Back, is based on Microsoft's acquisition last year of Jellyfish, which has been piloting such a program, the reports said. Jellyfish said on its Web siteTuesday night that it was "currently offline to perform necessary service upgrades and enhancements."

Meanwhile, there's still no word on Microsoft's other, more expensive effort to buy search market share.

Microsoft To Offer Cash Back To Search Engine Users In Effort To Fight Google

Microsoft will announce a new search advertising model tomorrow at the Advance08 Conference in Bellevue, Washington - some parts of the site are already live on Microsoft now (see screen shots below). The core of the new service will be a new set of 18 new vertical search offerings that will give users cash back on any purchases made from advertisers.


A number of high profile ecommerce sites are participating in the early stages of the program, which is being dubbed “Live Search Cashback” and is based at least partially on technology developed from Jellyfish, a company Microsoft acquired in 2007. A message on the Jellyfish site says the site is down “currently offline to perform necessary service upgrades and enhancements.”

The goal, of course, is to lure high value searches away from Google. Only a small percentage of total searches are highly valuable, usually because advertisers are right on the cusp of selling something to the searcher (searches for books, for example, or mortgages).

Microsoft’s hope is to lure advertisers with a promise to pay only if a purchase is made, unlike Google’s pay-per-click model that carries more risk because a searcher may not complete a transaction. And by offering a percentage of the fee collected from advertisers, Microsoft hopes to convince searchers to take the last mile to a transaction through the Live.com search engine, generating more advertising revenue for Microsoft and simultaneously hurting arch-rival Google.

The new product will be announced tomorrow morning by Kevin Johnson, the President of Microsoft’s Platforms & Services Division. We will be live blogging the event.

Farecast, a company they acquired last month, will likely power travel, one of the 18 verticals.

The Yahoo Angle

This fits with Microsoft’s recent re-engagement with Yahoo and a new proposal to take over Yahoo’s search business. Microsoft will look to make a big splash with advertisers right away. By removing risk (moving from CPC to CPA) they will get part of the way there. But Microsoft also needs to offer advertisers enough inventory to make it worth their while - Yahoo search traffic does that.

But even without Yahoo, Microsoft may find a warm reception from advertisers, who currently see a virtual monopoly by Google in the search advertising space. It’s in their best interest to have as many strong players vying for their business as possible, so any competition to Google may be worth their time.

Look for more details tomorrow morning.

Microsoft's "Cash Back" Google Search Killer: Great Idea, Won't Work

Microsoft Live Search: If at first you don’t succeed, pay your users

To some, this may read like an article from the parody site The Onion — but it’s not. Microsoft is preparing to unveil a new initiative for its Live Search product on Wednesday, one that will pay users to use the site, according to The Seattle Post Intelligencer.

More specifically the program, known as “Live Search cashback” (which is actually already live) will pay consumers who find and buy a product via Live Search a certain percentage of the purchase price back. Microsoft has already signed up partners including Barnes & Noble, Sears, Home Depot, J&R Electronics and Office Depot among others.

This new approach stems from Microsoft’s acquisition of comparative shopping engine Jellyfish last year.

Microsoft Unwraps Search Engine Reward Program

Microsoft launched a comparative shopping feature in its Live Search engine on Wednesday. The service offers consumers a...

Microsoft to Launch Cashback Service

Microsoft hopes to make gains on Google 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.

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