Microsoft's new tack: Bribery as a business model
So the news is leaking out fast: Microsoft plans to lure users by dangling cash rebates to people who buy stuff using the company's search. Will it work? At this point, I suppose it can't hurt--though no doubt Microsoft is leaving itself open to being ridiculed as a Delancey Street hondler.
Arnold Zafra over at Search Engine Journal wrote that he "cringed" when he heard about the news. Ouch.
A couple of thoughts:
This isn't the first time that Microsoft has tried something like this. As CNET News.com's Ina Fried noted Wednesday:
It has run a number of programs including its Live Search Club that offer rewards for those that use its search. The Live Search Club effort briefly boosted Microsoft's search market share last year, but the gains have proved short lived. Microsoft has been losing ground since then and has returned to a single digit share of the market.
But truth be told, it's not the worst idea. What's the harm in giving it a shot? In a recession--or whatever you want to call the current economic malaise in the United States--consumers are open to bribes (oh, I forgot: rebates). So why not see if this strikes the people's fancy? But this is only a holding action. The reason more people use Google's search is the user experience. It works better, so they keep returning. Microsoft CEO Steve Ballmer knows this. That's why he still thinks making a move for some of Yahoo's assets makes sense. He's anxious about staying pat with Microsoft's current search hand and wants to fix things, either through developing technology internally or buying it on the open market.
No way this is the final word.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.
Ever hear of "lobbyist"?
Where was this author when Google started peddling its Google Checkout service. Buy using Google checkout and get $10 off the sub-total. Isn't this the same. I hate when reporters (if you can call him that) are biased about what they write and definitely out of context.
If you are not the leader and you want to become the leader why not incent people to use your service back giving the money back that they make from the search!? You can laugh at them if you want but I'll be laughing right to the bank with the money I make back while the rest of people are busy ridiculing them.
http://bits.blogs.nytimes.com/2008/05/21/microsoft-searching-for-users-with-rebates/index.html?hp
More like a personal blog to me than a regular news article.
In a cinsumer space expect consumer hokeyness (is that a word?).
Lets see rebates on cars? Cash back on Mortages car loans? Coupons at grocery stores? Cash back incentives at Best Buy?
Google Yahoo have used similar systems?
Heck is not googles entire existence based upon advertising click model funding? Pass through ???
Sort of at awe with this article... wait I'm not in awe at all. I think the only reason I come to this site now and then is to see this kind of crap to remind me what good news is all about.
This site is more like a tabloid then a news site now... all eye catching headlines with no meat or substance with a ton of FUD and SPIN to please corporate sponsor'...
-
by PerrySTT
May 21, 2008 4:32 PM PDT
- Good to see that the comments suggest a more thoughtful view of "business chess" than does the vacuous article by "Coop" (who should go sit and the corner and think a bit more about this). Five things to consider (some already pointed out) if you think mockery makes sense here:
-
Reply to this comment
-
(11 Comments)1) Google just pockets all of the money it gets from advertisers -- isn't that worse than Microsoft sharing some of it with customers who are generating the value in the first place?
2) Reward models are proven/successful in credit cards, airlines, and dozens of other realms...why not in search, where $10B+ of advertising dollars float around
3) The value to advertisers of a program like this is probably even greater than the value to consumers, since they only pay for purchases, rather than clicks (e.g. sidestepping fraud, etc.) and this is a major step toward robust CPA models
4) Pretty powerful business move: if buyers flock to Live, is Google left with lower value informational and "upper funnel" searches only? Isn't 80% of the search advertising value in 20% of searches that are commercial in nature
5) Competitively brilliant: could Google really follow? What would happen to its market cap if it had to give away 50% of the value of each search to customers??? This is a classic attacker strategy: create a variable cost burden for the market leader
Not clear this will work, but I applaud Microsoft for trying something out of the box while its teams struggle to catch up with the superior search experience currently on Google.