In the midst of a bitter divorce from Yahoo Inc. (Nasdaq: YHOO), egg attacks on its CEO, and rumors that it's considering buying Facebook (Nasdaq: FB), Microsoft Corp. (Nasdaq: MSFT) yesterday announced a new plan for becoming relevant in search and advertising: paying search users.
With the new search service, "Live Search Cashback," users scouting consumer goods on Microsoft's Live search engine will be shown items from retailers selling them at a discount. If the user then takes the plunge and buys those products, a cash rebate will be placed in a user account set up by Microsoft. Different from cost-per-click, or CPC, which has stuffed Google's pockets (SGP), this method deploys cost-per-action, or CPA.
Coming on the heels of the launch was data from comScore today, detailing April 2008 search engine rankings for the U.S. The data shows Google received 61.6 percent of core searches, up from 59.8 percent in March. Next up were Yahoo (20.4 percent), Microsoft (9.1 percent), AOL (4.6 percent), and Ask (4.3 percent).
According to York Baur, EVP of corporate development at Zango and a former Microsoft employee, this move will help Microsoft get recognized with consumers, particularly because of the current bleak economic outlook in the U.S. "The margins in search are ultimately so huge that you
have to question whether they are or should be sustainable. Giving some of that
back to the consumer is a great way to take search into the next phase," he says.
"The airline industry, the hotel industry, the friggin' grocery
industry all have customer loyalty programs -- why would the Internet be any
different? It takes somebody like Microsoft that has the position and resources to be
able to drive it that way -- and, frankly, drive Google kicking and screaming to do
Regarding Steve Ballmer's tenacity in taking Google to the mat, Baur says, "They will chip away at a market until they get it
right... Ultimately I wouldn't bet against [Ballmer]."
In response to my request for comment on Microsoft's latest plan of attack, a Google (Nasdaq: GOOG) spokesperson provided the following statement via email, which I am mainly publishing for humor's sake:
Search is a
highly competitive industry and we welcome competition that stimulates
innovation and provides users with more choice. Having great competitors is a
huge benefit to us and everyone in the search space -- it makes us all work
harder, and at the end of the day our users benefit from that.
A proposed translation, in terms not drenched with bunny-huggery and teeth-clenching grins: "This is SO not a threat to us. Carry on, losers."
But, you tell us. Is this a threat for Google? Will you make the move, for money's sake? Take a quick poll, why don'tcha? I won't pay you or anything, but I sure will think of you fondly.
— Nicole Ferraro, Site Editor, Internet Evolution