Searchers to Get Cash Back

A new promotional program for Live Search, Microsoft’s online search site, will reduce advertisers’ risk while giving searchers cash back on purchases they make after clicking advertisements. The program, Live Search cashback, could be very popular among advertisers, and may force competitors to respond with similar programs. To succeed, however, Microsoft will have to do a better job marketing Live Search to end users.

Some Success with Past Promotions

The cashback program, which launched on May 21, 2008, is Microsoft’s latest effort to draw more users to its search engine, which has lagged in distant third place in U.S. market share since it launched in early 2005. According to Apr. 2008 figures from Nielsen, Live Search had just less than 10% of U.S. search queries, which is more or less where it’s been since launch—far behind Google (which had 62% in April) and Yahoo (18%).

In the last year, however, Microsoft has discovered that offering incentives to end users can increase its market share temporarily. Live Search Club, which offers prizes such as frequent flier miles and charity donations to frequent searchers, launched in May 2007; in its June 2007 report, Nielsen reported that Microsoft’s market share had increased dramatically during the month, from 8.4% to more than 13%, where it stayed through the summer.