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March 15, 2007

Microsoft pays businesses to use Live Search

Posted by David Hunter at 9:45 PM ET.

Bill Gates famously suggested that Microsoft might share part of their search revenues with users, but how about providing “financial incentives” for businesses to have their employees use Live Search?

In an apparent attempt to boost its disappointing Web search market share, Microsoft is giving financial incentives to large enterprise customers whose employees use Microsoft’s Live Search engine.

The program is being tested with “a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search,” Microsoft said in a statement provided through the Waggener Edstrom public relations agency Thursday evening.

In exchange for their employees’ Live Search usage, Microsoft is providing “service or training credits” to these enterprise customers, the company said. The program also allows the vendor to gather feedback from these users regarding Web search use in an enterprise, Microsoft said.

When asked what type of usage commitment participating companies must make, a spokesman for Microsoft declined to provide further details about the program.

I expect that there is less here than meets the eye, but the thought of a Microsoft Live Search incentive program for businesses gives rise to all sorts of amusing possibilities. A little programming of a random query generator by the office hacker and Microsoft might end up owing 10 million hours of training. You also have to wonder whether the employees are expected to or allowed to click on the ads.

Update 3/16: John Batelle has more details on the incentives from what is apparently a Microsoft pitch presentation:

The value is non-trivial – the presentation estimates companies can get from $2 to $10 per computer annually, plus a $25K “enrollment credit”. For sites that have tens of thousands of computers, that can add up to hundreds of thousands of dollars in free stuff from Microsoft. Most large enterprises spend millions on Microsoft services and software each year. It’s not hard to imagine a CFO getting slightly moist over savings like these.

In short, Microsoft is leveraging its massive installed base – and its cash – to push search. It’s not a bad idea, though there are possible drawbacks. The presentation goes into detail about how a large company might promote this program to its employees, suggesting three levels of communication – “low, moderate, and high.” Moderate and high promotions include “In-house training session on ‘how to get the most from web search’ using Windows Live Search,” “Remove all existing toolbars,” “Set Homepage to Live Search,” and “Email message of encouragement from CEO.” IE 7 is mandatory for the program, as one might expect.

Interesting. This could work, but it could sure backfire. How would you feel if, to save a few bucks, the CIO and CFO dictates that you now have to use IE7 preset to Live Search?

I take back my original comment above that there was likely “less here than meets the eye.” It’s really a full scale eyeball auction and Microsoft has the advantage of bidding with its own currency.

Update 3/16: Joe Wilcox has yet more details and for the moment it’s just a pilot program.

Filed under Coopetition, General Business, Google, Live Search, Marketing, Microsoft, Windows Live, Yahoo

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