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The search engine business caught Microsoft’s eye years ago.  Now, Microsoft is attempting to edge out Google by offering users cash back when they make purchases using Live Search.  Will the incentive succeed in giving Live Search  a piece of Google’s market share?  Microsoft is banking on it.

Most end users think of search engines when they need quick information.  Instead of searching a specific site for information, users will hop to a search engine site, enter a key word or phrase and expect to see a smorgasbord of results.  Information on news stories, recipes, flowers, dog breeds, or restaurants can be found with just a keyword and a click.  As Google’s company goals  proclaim, “[Our] mission is to organize the world’s information and make it universally accessible and useful.” Particularly appealing is the ability to use a search engine for a price check.  As Michael Arrington  of TechCrunch.com pointed out, “68% of online purchases begin at a search engine or shopping comparison site.”  Using search engines as a quick means to locate a specific product at the best price is very appealing when driving around to find a bargain is becoming more costly.

While Google dominates the current search engine market, Microsoft’s Live Search is launching a three-pronged attack in this Goliath vs. Goliath battle.  First, Live Search is offering cash back incentives for consumers who use their search engine to buy a product online.  In Live Search’s FAQ , the policy offers cash which can be directly deposited to a bank account, a PayPal account, or sent to the customer via a check in the mail.  At this time, the offer is only open to US citizens or legal residents 18 years or older with a valid mailing address.  Second, Live Search will offer a new technology that will only charge advertisers when a customer completes a sale.  Finally, Live Search is streamlining its services by relinquishing non-lucrative spin-offs such as Live Search Books .

Incentive programs for e-commerce aren’t new.  There are a myriad of websites devoted to rewarding shoppers, such as MyPoints , Jackpotrewards , and Sunshinerewards .  Each company offers its own spin on rewarding customers for purchasing through their site.  Gift cards for specific vendors, cash back rewards, chances to earn entries in weekly million dollar sweepstakes, and free shipping are a few of the perks that shopping sites offer.  But navigating through a shopping site can frustrate even the most frugal bargain hunter.  Search engine based shopping offers consumers similar rewards but with more robust capabilities and a larger array of merchandise.

Live Search has a lot of ground to make up if they’re going to compete with Google.  According to comScore , of the 10.6 billion searches made in the month of April, Google had the lion’s share with about 6.5 billion.  Live Search’s portion of the pie: 961 million.  There’s certainly room to grow, and with Microsoft’s deep pockets, the cash incentive business model is one way of wooing users and potential customers.

Perhaps Microsoft isn’t looking to be number one but just give Google a little competition.  While Live Search’s strategies will help it win market share, it isn’t creating a whole new way of shopping the web.  As tech blogger and publisher Tim O’Reilly  observed, “Google’s search dominance will be toppled by a disruptive innovation that changes the game, not by playing catch-up at the same game.”

Wednesday, May 28th, 2008 You can skip to the end and leave a response. Pinging is currently not allowed.

By Alicen Hogan