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Just like their Live Search Club , Microsoft’s Live Search cashback incentive program has drawn some "entrepreneurs":
That’s right, $630 in cash can be yours for $714. But if you access the page through a Live Search ad link that returns 35 per cent of the purchase price, you can make up the difference. And then some. So you make a profit, and so does the seller. At the expense of Microsoft and eBay.
Hit the link for further details as it is not clear that Microsoft is actually offering 35% anymore, but this was as inevitable as death and taxes.
This week, Microsoft announced the acquisition for an undisclosed sum of Navic Networks of Waltham, Mass., a privately held company with about 80 employees specializing in addressable advertising and interactive television applications. Much press comment has been to devoted to the interactive television technology which, for example, would let a user interactively request more detailed information during a commercial. This seems unlikely to me, but then I find it hard to believe that viewers sit for hours watching the home shopping networks.
The real pony to my mind is in the addressable advertising – via cable or satellite set top boxes Navic’s technology can individually address each consumer household, monitor what channel they are watching, and deliver targeted advertising on an individual household basis. Moreover, as Benjamin Romano reports at the Seattle Times, "Navic’s technology reaches some 35 million digital set-top boxes in North America via cable providers including Charter Communications, Cox and Time Warner."
With that kind of demographic information, Navic surely has a leg up in selling advertising although they do have to share the booty with the cable and satellite operators. It’s not all a bed of roses though, as the cable operators have also formed Project Canoe to sell targeted ads themselves while Google TV has partnered with Dish Network to do the same thing.
Still, the big question is why Microsoft wants to be in this business. Brian McAndrews recites the current Microsoft mantra, "In the long run, we want to be a platform across all media," but that only begs the question of whether the ad biz is really the most profitable investment for Microsoft’s cash.
Back in 2005, Bill Gates suggested that Microsoft might provide financial rewards to attract search users, but the devil is, as always, in the details. You can’t pay for raw numbers of searches, because the scammers would be all over it and the Live Search Club games of last summer had a similar problem. Now according to the Seattle PI’s Todd Bishop, Microsoft is set to try again with the announcement of an incentivized shopping promotion called Live Search cashback which only pays if you buy products from selected retailers. The somewhat oldtimey slogan is ‘Microsoft Live Search cashback is “The Search That Pays You Back”.’
The basic idea is that you “search for cashback deals at Live Search cashback” and if you buy, Microsoft will put an incentive payment of some percentage of the purchase price into your “cashback account” which you can withdraw in cash. What keeps it from being merely an incentive shopping site is that if you perform a regular search at Live Search, available cashback deals will be flagged with a little gold coin/dollar sign icon.
Microsoft has apparently signed up a number of major retailers and is presumably making the incentive payment out of a sales commission paid by them. The incentivized shopping model is hardly new, but what is new is that it is being associated with a legitimate search engine. While I hope participation in the program doesn’t affect the rankings of search results, the suspicion always is that by mixing search results and what are effectively paid ads, the search engine is stacking the deck. More may be known when the formal announcement is made later today.
Update: The speculation is that this is based on the technology Microsoft received last year when they acquired the Jellyfish comparison shopping site which had promised to “SHARE at least half of every $1 we earn when you shop and buy products using Jellyfish.com.” Also per the FAQ, you have to be a US resident to participate.
Update: The formal announcement doesn’t add much to the above. Some stats:
The complete Live Search cashback product portfolio includes more than 10 million product offers from more than 700 merchants, including more than 13 of the top 40 U.S. retailers.
Microsoft also announced Live Search Farecast for finding travel deals. It uses the technology acquired with Farecast in April.
Microsoft is never shy about reaching for the wallet to buy technology and the associated developer talent to embellish their offerings and this week’s shopping cart holds Rapt Inc,, an advertising yield software developer, and Kidaro, a provider of desktop virtualization management software.
