It is interesting that they are trying to take on cashback affiliate sites. I do wonder whether this model is sustainable long term. I know of at least one UK retailer who is no longer working with cashback sites.

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System: The following 2 messages were spliced on to this thread from: http://www.webmasterworld.com/msft/3655268.htm [webmasterworld.com] by engine - 2:45 pm on May 21, 2008 <small>(utc +1)</small>

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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]

This is one of those offers where you'll want to read the fine print...

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. :)

Anyone know how a merchant can be part of this program?

Nevermind...found it...sort of...
[advertising.microsoft.com...]

[edited by: vetofunk at 2:29 pm (utc) on May 21, 2008]

Well almost purchased a product and then saw the store was listed here. They were giving 9% back, plus I found a 15% coupon code elsewhere, so saved about $20.00 total.

I will see how it shows up in my live account and when.

omg, if this is real than maybe Bill Gates really is going to pay me if I forward those emails!

Yawn, this is a desperate attempt for Microsoft to bribe their way into the general public mindset. It won't wash and hopefully they will fall flat on their face even further than ever before.

Is this really any different than what ebates does?

Sounds exactly like what ebates does.

This will definitely make the affiliate marketing crowd cry foul.

I was just informed that Shopping.com tried this a few years ago and dropped it shortly after launch. Maybe MSN will have a better go at it? And, who is powering those results?

Unfortunately, it won't replace accurate and trustworthy SERP's

I can give away all of the air fresheners I want, but it doesn't make the ride better...

Microsoft is really beginning to appear desperate. How about spending a little more on developing a better search engine instead.

Unfortunately, it won't replace accurate and trustworthy SERP's

From a news story today:

"Microsoft said that 700 merchants offering more than 10 million products have agreed to participate in the program..."

My question is what effect will it have on their SERP's in general? In other words, is MS going to adjust it's algo so the companies that participate in this program will get better position? If any of us are selling products that are also being offered by the initial 700, will we drop in the MSN/LIVE search results as the partner company rises?

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.

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Boring? You guys are crazy... This isn't Microsoft giving money away for free. Rather they are getting cuts of the commissions and are using this as a market entry strategy to expand into a new revenue source (common market entry strategy).

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

Cash back is hot these days, Thats the entire reason sites like fatwallet exist.

From today's Washington Post regarding MS Cashback:

"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]

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[edited by: Reno at 1:09 pm (utc) on May 22, 2008]

NICE. Spend that money online. This will be great for those of us in E-Commerce.

Have u seen how crap their site is. It is so desperate.

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.

Nothing to lose is alot different in my books than 'brilliant'. This is unlikely to hit Google in the core.

Glad to see this. I really hope that cashback eats itself as quickly as possible.

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.

I wonder where MS can/will turn if this idea doesn't work?

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 ;)

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Wow....obviously the WebmasterWorld community doesn't care about this AT ALL.

..wonder if they'll have better luck with 'Joe User'?