Microsoft's Cashback Program is Working: 15% Uptick in June Searches

Back in June, I theorized that Microsoft (MSFT) maybe on to something with their live.com cashback program and said: "Personally, I'm anxiously awaiting the June search data from comscore. I think we'll see Microsoft Live search take a little share.".

Well comscore is out this week with their data and DRUM ROLLLL....

The results are bigger than I expected!

In a seasonally slower m/m environment you'll see that Microsoft increased queries 15% and for the first time in a long time that I can remember, increased share .7% which is pretty material in the world of search.  And you know what?  Not even that many consumers know about this new program.  If I'm Microsoft, I'd pour some gas on this little fire and do some more advertising, maybe crank out a print ad or TV ad and test that out.  Also, eBay (EBAY) is on sale right now for $31b.  If Microsoft starts to believe this e-commerce strategy is how to outflank Google (GOOG), I think it's increasingly likely they look hard at eBay vs. Yahoo! (YHOO).

Disclosure: Author is long eBay and Google.

Comments

[dune36]

Go Microsoft! Cashback is the right way to go for everyone - vendors only pay when a sale is made, as opposed to when an ad is clicked; and the rebate goes to the customer, instead of to the deep pockets of a giant corporation.

[User 228966]

The problem with Microsoft's goofy cashback plan is that it isn't economically viable. The more share they gain, the more cash they lose. If they had decent share to start with, it would have been a non-starter out of the gate, but with their patheticly small audience backed by a cash-cow monopoly, then can pay for a few points on paper for a few months. The second they stop, people will revert back away from Live. If I opened a new gas station in the sticks and sold gas for $1 per gallon less than everyone else, people would come from far and wide to take my money, but when I inevitably raised the price back to market rates, those people would be back at their local Shell before you could say "Vista sucks"!

[outbackvandy]

The statistics doesn't necessarily mean people are searching more on live search engine. Many people just do a random search to get the cashback link to show up. After you take out those people, how many will actually stick with Microsoft's live search? probably a very small percentage. Paying someone to use your product as a promotion only works if you have a good product in the long term. I agree with user228966, it's not sustainable.

[Social]

This is an awesome blog!
It very nice to read your posting! Thanks for the great work!

[blah-blah]

It's not economically viable for a large market share but this was exactly what MS needed to do. Changes can be made later with the vendor to make it a break even proposition at best.

It's all about market share and once you have that, you can monetize it later.

Like everyone out there I might use Google for basic search but it's live.com I will use when I buy anything. You might get more value for the eyeballs from Google but the real payback is coming from MS.

[jakedeez]

This debate is stupid. Incentivized marketing has never worked. Microsoft had a change to buy google for a billion, they blew it. Buy under 25, down to 22. Sell over 28. What else is there really to say?

[Et tu,Brute!]

Juat a tad premature to be gloating, doncha think?!

[woodhorb]

wow goog dropped from 61.8 to 61.5 and msft now has 9.2; much of that was people having a quick look see; most will revert back to goog as they realize it's mainly a gimmick not real massive savings; somethings under this scheme costs more despite the discount; mainly a short term diversion; no real threat to goog dominance

[User 111092]

While I agree with 228966 I'm gonna play devil's advocate for a moment. MS has money to burn, and they really could manage this long term (MS Games should be all I have to say on the subject). While I agree that it's completely unrealistic in the long-term, if they maintain that rate of growth (more than likely it would increase even past 15% as more everyday people hear about it) for, say, a year, don't you think they could stand to take a pretty substantial chunk of the search engine market?