Tariq Ali, is the founder and chief editor of Microsoft announced a new "Cashback" search service that pays a rebate for buying products found through Live search engine. Users of the program can receive 2 percent to 30 percent if they buy items found using Microsoft's Live search engine. Microsoft will partner with more than 700 retailers and will offer advertisers a cost-per-acquisition model of payment, meaning that they only pay for ads that lead to purchases.
Today's news bullets:
Although the so-called "cash back" idea - which offers customers rebates on items purchased through Microsoft's search technology - could tempt customers to use its search facility, it's probably too little, too late to close the gap with Google.
"Cash back is a neat idea, but I don't believe it will change the behavior of the vast majority of Internet searchers," said Ian Maude, an analyst with U.K.-based firm Enders Analysis.
- Will a program like this help Microsoft catch up to Google in the search wars? "No way. Donovan Gow, an analyst at American Technology Research points out that Microsoft has about 10% of the market while Google has more than 50%. "This is not a game changer," Gow said.
He noted that the rebate program combined with Yahoo!'s search business would be a more realistic way for Microsoft to catch up to Google in searches and search advertising. "
- Microsoft rebate program is a further evolution of those rewards programs, according to Danny Sullivan. "Perhaps it offers more incentive for "regulars" to return. But to me, it seems seriously flawed. I feel like Microsoft has built a "coupon" or "rebate" search engine that may attract a subset of people looking for bargains on products they already know they want. That's a far cry from attracting the core search audience that Microsoft so very much wants to pull away from Google."
- Microsoft also declared it's making strides in so-called engagement mapping services to help advertisers gain greater insights into consumers' buying decisions online. "Right now, most advertisers rely on data about the last ad clicked as the sole indicator of what drove a sale. Microsoft said its mapping services provide other measurement points about online sales such as the amount of space the ad takes up on a Web page and how many times a user sees an ad.
Coming up with mobile and in-game advertising strategies is another big focus in Redmond. Robbie Bach, president of Microsoft's entertainment and devices division, said the number of cell phones that can receive rich media ads is going to triple in the next couple of years. "We think mobile is a tremendous opportunity going forward," Bach said. "Those phones will have the capability to play Xbox games."
- VCs see hungry Microsoft prowling to buy a chain of smaller companies, venture capitalists participating in the Reuters Global Technology said.
"If they can't buy Yahoo, they're going to do whatever it takes to dominate that space," David Chao, co-founder of DCM, said.
Navin Chaddha, managing director of Mayfield Fund, said the hype over social networks may not be overstated. Advertising in the sector is expected to grow to $2 billion this year from $1.2 billion in 2007, he noted.
"It's going to be mainstream, it's going to be ubiquitous, it's where people are going to hang out," he said. "There's going to be scarcity value. The next Yahoo, the next Google ... are going to be created. If you have this kind of scale, you are bigger than any TV network."