NEWS: The Empire Strikes Back: Our Analysis Of Microsoft Live Search Cashback

The Empire Strikes Back: Our Analysis Of Microsoft Live Search Cashback

Michael Arrington

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Everyone has an opinion on today’s move by Microsoft to shake things up in the search space with their new Live Search Cashback product that shifts search advertising from cost-per-click (CPC) to cost-per-action (CPA) and give a lot of the revenue back to users. Most are negative. Some excessively so. After hearing Bill Gates give the pitch and trying the service myself to make a couple of purchases, here’s what I think: It’s a bold move that goes for Google’s throat, and it will likely have a material impact on their search market share.

Our complete analysis is below. 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. ...

Ed: Lots of data and conversation. Strategically attacks SEM, not search.