Cha-Ching: Microsoft Pays Users to Search with Bing

Includes: AABA, GOOG, MSFT
by: Boaz Berkowitz

Starting today, Microsoft (NASDAQ:MSFT) plans to actually pay users to search via Bing. Yes, you read that correctly - they will PAY you, in cash, to use Bing rather than some other search engine such as Yahoo (YHOO), or more likely Google (NASDAQ:GOOG). How will they do this? When you shop online through the Bing search engine, Microsoft will refund you a portion of your purchase price at its own expense. Okay, they have actually been doing this for a while, but starting today they will double that amount to up to 50% of your purchase price. That’s worth taking notice.

In practice, this concept isn’t entirely new. Many e-commerce sites have affiliate programs which will pay a third party site (like Bing) for referring customers to them. Microsoft’s search engine has taken advantage of this by combining its search engine capabilities with various affiliate programs. When a buyer searches for an item on Bing and then purchases it, Microsoft gets paid a commission for the referral. There are many sites that do this, but Microsoft is the only one that refunds 100% of this commission back to its users. For more on this, read my last article on Microsoft’s (formerly here. As you can see from the article, Microsoft has dabbled with paying users out of pocket to shop via Bing in the past. Previously, they have offered similar promotional discounts to specific stores like eBay (NASDAQ:EBAY). In that instance, users received up to 30-35% cashback for making their eBay purchases through Bing. But with this promotion, they will double the cashback on ALL affiliate stores, up to 50%!

Want to save 50% at FTD Flowers (NASDAQ:FTD) or 50% at Footlocker (NYSE:FL)? You can, but only if you buy their items through Bing. For a full list of stores and the amount of cashback available click here (you can then view ‘all stores’ and sort by cashback value to find those with the largest savings). All amounts listed are doubled for a limited time.

What is really surprising is that Microsoft not only refunds 100% of the affiliate revenue to its users, but for the purposes of this ‘Back to School’ promotion, they will be matching these revenues at their own expense, effectively doubling Bing users’ savings. This was confirmed in a letter sent by Bing to its participating merchants last month. In this letter the stores were assured that the cash handouts would be coming from Microsoft and Microsoft alone.

To many, including me, it would seem crazy, even downright desperate for a company to pay customers to use its service. But in reality, how foolish is it? Many companies spend millions if not billions of dollars in advertising annually; Microsoft is just taking some of this money and handing it out to the masses instead. If Bing cashback is a form of advertising, it is having the desired effect. The Bing brand name was launched this past June and less than one month later, 25% of US adults already recognized the name somewhat. That is a hugely successful brand recognition campaign, even if “to bing” hasn’t quite made it into Webster’s dictionary as a verb yet.

Bing does seem to be gaining in popularity, though they have a long way to go. According to ComScore’s recent rankings, Google still controls 65% of searches to Microsoft’s 8.4% and Yahoo’s 19.6%. While Microsoft did show a slight gain in share, it was at Yahoo’s, rather than Google’s, expense. Another indicator of some success, while the volume of search queries declined for Google and Yahoo, Microsoft saw a 3% increase.

It will be interesting to note how this new promotion combined with the recent Yahoo-Microsoft revenue sharing deal will impact these numbers in the coming months. But the overall question remains, will Bing shoppers be sticky and continue to use the service in the future? That is something of which I’m still not entirely convinced. Regardless, Bing has gotten some great reviews (just search for ‘Bing’ on Seeking Alpha for a slew of articles about the search engine). So why not give it a try and make a little money on the side while doing it? Whether or not the promotion pays off for Microsoft, it will certainly pay off for Bing users.

Disclosures: None

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