Microsoft to Offer Rebates to Its Search Engine Users

By May 22, 2008

On Wednesday, Microsoft unveiled a plan that will give users cash rebates after they make purchases found by using the software company’s search engine.   Under the new program, users will receive a percentage of the price they pa

y, deposited into an account set up when they sign up for Microsoft’s Live Search. After that total reaches $5 or more, the users can collect it through PayPal.   The cash-back program is Microsoft’s newest attempt at competing with Google. Its numbers stagger in comparison to Google’s in terms of advertising dollars and search engine users, and a recent attempt to better compete by acquiring Yahoo! for $47.5 billion failed.   The new program is aimed at changing the way advertising dollars are charged and spent, says the company.   The rebates are funded with a portion of advertising dollars, so instead of the current method of paying by click, advertisers could start paying by action, such as a completed transaction.   Originally, advertisers paid for ads by the number of views, but more commonly they pay by the number of clicks. By charging by number of transactions Microsoft hopes to change the dynamic of advertising revenue and put itself in position to tighten the gap between itself and Google.   "It's exciting. I think years from now you may look back and say, 'Wow, search started to get a fair bit more competitive,' and you can look back to that announcement," Microsoft founder Bill Gates said.   Although rumors have been flying about revamped talks between Yahoo and Microsoft about an acquisition, both companies have been quiet about the issue.   Microsoft claims its efforts to catch up to Google now lie in improving its search engine, and the Microsoft Live Search rebate program is just the beginning.   By Danny Scuderi   FEEDBACK For comments on this article, email us at

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