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Microsoft Corp. (NASDAQ: MSFT) shares dropped 1.77%. OK, you can say it was just as much as the Nasdaq dropped, or you can also say that no one was really impressed with the software giant's new cashback on search service.
It is no secret Microsoft is trying to boost its internet division and gain search market share. After so often being accused of being a monopoly, I guess it's hard for it to see Google Inc. (NASDAQ: GOOG) now being accused of the same in the lucrative business of internet search. Well, Microsoft tried to acquire Yahoo! Inc. (NASDAQ: YHOO), No. 2 in search (although it is also losing market share to Google) but we all know that didn't work out all that well... at least not yet. I get the feeling we haven't heard the last on that subject yet.
To address its search insufficiencies, Microsoft Wednesday rolled out Live Search Cashback, a new service that pays consumers who buy selected items from participating retailers found through Microsoft's Live Search engine. Only a portion of the purchase price, of course, between 2-30% will be paid -- via check, direct deposit to a bank account or eBay Inc. (NASDAQ: EBAY)'s PayPal. So naturally, those wishing to use the service will need to sign up and provide Big Brother with even more personal information.
No one can tell me this doesn't smack of desperation. Is Microsoft really serious in thinking this could actually make a dent in its search business? The cash rebate might attract some people, but that doesn't mean they're going to change their search habits. If anything, they might still search on Google, then go to the Live engine and find what they want there. The rest of time, I bet, Live will not be in use! Of course, the higher the cashback, the more people it will attract, but doesn't that sound a little backward? How much can Microsoft spend on that? And couldn't Google at any time counter with a similar offer should it choose to?
I'm sorry, but this just doesn't sound like it would change anything in the reality of search today.
Microsoft's cashback on search looks like a desperate move
Posted May 21st 2008 5:40PM by Melly Alazraki
Filed under: Products and Services, Launches, Consumer Experience, Competitive Strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), eBay (EBAY), Marketing and Advertising
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Reader Comments (Page 1 of 1)
5-21-2008 @ 6:04PM
Dan Barnett said...
Discover Card started the "cash back" rebates years ago. Now almost all the credit cards offer rebates of some form or another. perhaps Microsoft will be no different & I'm not sure your idea of serching on Google & buying on Microsoft's site is a bad deal for either Microsoft or its' advertising dealers.
5-22-2008 @ 1:52AM
AndrewP said...
You can get cash back from any item at a participating site.
5-22-2008 @ 7:38AM
B. Harrison said...
So, if I pay for the purchases with my Discover Card, I maximize my cash back amount? That would be okay.
5-22-2008 @ 10:25AM
Thomas said...
Wouldn't you think that the real winner here is EBAY's Paypal?
May have to get some EBAY.
5-22-2008 @ 4:32PM
Dan said...
Yeah, you're right. How could Microsoft think it could put a dent in Google's search engine business. They should just pack it in and give up. Quit, it's the American way. The last thing anyone wants to get when they shop is extra money. Or perhaps Microsoft has decided to take a different approach and have retailers pay their search engine provider when someone buys something rather than just when they search for it. I'm not saying Microsoft Cashback will do well, or that Google isn't by far the best search engine, I just think you're dismissing Microsofts approach and failing to see it is an entirely different business model that might start to bite into Google market share. If you are a vendor would you rather pay to have someone look at your stuff or pay when they buy it? If Microsoft put together a nice engine to support this model it could be interesting. History says yes ...but it will take a while, and everyone will use it and talk about how much it sucks ...but keep using it.
I don't have much to do today at work.
5-22-2008 @ 8:01PM
Fred said...
Well, since you mentioned MSFT's share dropped 1.7% in the day, I would like to point out what you left out is that GOOG dropped almost 5% in the same day. Hmm ... I must smell blood ...
5-22-2008 @ 9:31PM
Kenneth said...
Can't we all just get along. I think they need to share the wealth and let sombody else eat before there's only one company left in the world. (business credit cards) - http://links210.freehostia.com