The Empire Strikes Back: Our Analysis Of Microsoft Live Search Cashback (TechCrunch)
StarWars Trilogy happens to be my favorite Movies. That’s the reason the headline caught my eyes and an afterthought posted here. For those who missed the announcement of Live Search Cashback, here is a catch-up.
For Consumers:
1. You make a commercial search on Microsoft Live Search.
2. You get certain % of discount (your cash rebate) if you purchase an item listed.
3. You still have to pay full price to the vendor; Microsoft will transact the discounted cash to your Cashback account afterward (60 days).
For Advertisers:
1. The % of discount is the bidding price for exposure of items, just as how Google AdWords bidding system works.
2. All the money advertisers paid for bidding ad-inventory goes to consumers who buy their item via Live Search. It means Microsoft get ZERO revenue from advertisers’ CPA fees.
That’s pretty cool. Advertisers pays indirectly to the consumers taking their desirable actions. Though Microsoft gains 0 $ right now, it could split the CPA revenue with consumers in the near future as long as users get addict to this model.
So, let take a look at what A-list bloggers thinking about the initiative:
First, Michael Arrington’s takeaway makes me lol (sincerely)
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.
Sometimes, desperation is a good place to be because it forces you to try crazy stuff.
One paragraph mentioned it’s nearly impossible to conquer Google’s sheer search market share (60%+) by technology-improvement solely. This really resonate with my previous post, 下一站，獲利模式.
It’s clear that technology alone will not unseat Google as the dominant player in this market. Microsoft already tried that with their AdCenter improvements in 2006; Yahoo tried with Panama last year. Google’s dominance only grew.
Hey, think about this: Microsoft sacrifices its revenue for market share! Rarely can we see a tyrant make such a sacrifice, if any. I told you MS is no longer seating on the evil emperor’s throne, didn’t I? : P
By the way, I like Silicon Alley Insider’s comment:
The success of the cashback endeavor, of course, depends primarily on query volume, and convincing consumers to stop using Google and start using cashback by offering modest savings is going to be a tough sell. But even Google fans and Microsoft haters have got to admit–it’s a pretty cool model. It’s YOUR attention, after all. Why should Google make $20 billion off of it
True, true. Seems nobody’s ever asked why Google AdWords NEVER pays me money while it’s my click-behavior & my attention that make Google employees rich.
Finally, one should listen to Bill Gates’ saying before making any judgement. His keynote on Advance ‘08 keynote: (Live Search Cashback official press release)
During his keynote address, Gates outlined three areas of focus for the company’s broad search vision:
- Delivering the best search results by continuing to focus on relevancy and selection
- Expanding the role of search around the set of tasks that searchers are most often working to accomplish — including commerce, entertainment, navigation and reference — through improvements in its user experience, intelligent tools and access across devices
- Innovating in the economic model that today powers the search business by rewarding both advertisers and consumers for engagement
Is Live Search becoming a more vertical-orientated search engine? Not a bad idea to break Google’s stronghold.
(Gates’ pitch on Live Search Cashback)
Tags: Cashback, Google, Live Search, Microsoft
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