Microsoft Offers Shopping Discounts Via Search Engine
Washington Post Staff Writer
Wednesday, May 21, 2008; 12:51 PM
Attention shoppers: There are bargains available at Microsoft's search engine.
In a dramatic attempt to undercut Google's dominance in search, Microsoft is announcing today that it is offering discounts to consumers who do their Internet shopping using its search engine.
Under the Live Search Cashback program, consumers shopping for items offered by participating merchants will be refunded a percentage of the price if they buy them through the Live Search engine.
Typing in "video cameras" into Live Search and then selecting a model, for example, a consumer can see merchants offering added discounts of 2 percent to 9 percent.
The program is a part of Microsoft's plan to "innovate and disrupt" in search, according to an internal memo Sunday from Microsoft exec Kevin Johnson.
Microsoft's move represents a potentially significant change to the search industry, one of the most lucrative businesses today on the Internet. Of the $20 billion spent on Internet advertising last year, about 40 percent was spent on advertisements accompanying search results. Google has garnered the lion's share of that money, and its mastery of the field has powered its rapid corporate ascent. Google functions in essence as an Internet guide for most users.
Microsoft and Yahoo, which offer competing search engines, have struggled to catch up in search and other online services.
"The fact is that we are not where we want to be in this business yet, and we've been in this position longer than we'd all like," Johnson said in the memo to employees.
Now comes the Cashback program, which poses a potentially different business model for search engines, one that is designed to enhance its appeal to both consumers and advertisers. Consumers get the discounts. Advertisers, meanwhile, will pay only when a consumer makes a purchase, not just when a consumer clicks on an ad.
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