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May 21, 2008

Microsoft Search: It's Payback Time

Microsoft's latest foray into search and advertising comes in the form of rebates if a user shops through Windows Live Search.  Certain products listed in search results will have symbols that indicate rebates from 2% to 30% if purchased through the web site.  It's win-win for Microsoft and advertisers.  Microsoft gets to increase its search market share (now in single digits compared to its competitors) and advertisers get results on ads placed with the search service.  Consumers get something as well, a small bargain and the privilege of revealing in some detail their shopping habits against a profile.  After all, one will need a Windows Live Search ID and login to get the money. 

Microsoft is counting on the tanking economy to drive people seeking online bargains.  No need to spend gas on brick and mortal purchases when that same expenditure can be built into shipping and handling charges.  Cash returns aren't immediate, as there is a 60 day period before they become finalized.  That has to do with potential product returns and other shopping issues.  Once the 60 days pass, however, the consumer can claim the money in their account.  Google will be quaking in their boots over this one.  One would think this model would have been implemented long ago in our consumer driven culture if it had legs.  A small amount of money for shopping may not be enough to get the critical mass that Microsoft seeks for its search engine.  Oh, wait, Microsoft did try something like this a while back, and yes, it boosted their online search share -- temporarily.  The Microsoft FAQ on this has more details. 

The other thing Microsoft is willing to do to make money seems to be subsidizing music for the Zune in return for turning the Zune Social experience into ad campaigns.  Microsoft's example is an hypothetical ad campaign for Doritos where that brand is prominent on an artist page.  "Free" music from that artist could be available for download from that page, along with a brief ad that appears on the Zune.  There would also be links on the page where excited users can start a viral promotion by emailing their friends.  Who know, there may even be coupons for a free bag of Doritos.  Will those potential downloads have DRM restrictions on them?  We won't know until someone actually goes live with this scheme.  Microsoft still needs to get people to buy into the Zune to get it past its niche status.   As music experiences go, this one may not rise above the competition.  More in PC World.

May 21, 2008 | Permalink

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