Microsoft have announced today that they will be launching a cash back system for purchases made using its Live search engine.  Utilising partnerships with ebay, paypal and jellyfish they will offer remuneration to users who find a product using live search and then make a purchase.  This is an amazing step from Microsoft into a market traditionally held by the affiliate world and heralded by the networks as the big growth area for affiliate marketing   My own experiences of cash back sites are limited due to the way it opens the advertiser up for fraudulent enquiries/sales by incentivising the individual.  that doesn’t mean to say it cant work in the right situation and the entrance of Microsoft into this world not only says they have identified it as a growth area but also could have major implications for the cashback industry as a whole.  On the one hand it could bring the service to the mass market and mean the user base for such size grows exponentially over the next year or so.  On the other Microsoft may decide they want to dominate this industry and use it as a USP for Live search and decide to crush the independent sites in the way only they can.  Id certainly be getting a bit twitchy if I was a cashback publisher at the moment.  full article below

May 20, 2008

Microsoft to Launch “Live Search Cash Back” Tomorrow

The major Microsoft Live Search announcement scheduled for tomorrow will be the official launch of a new product: Microsoft Live Search Cash Back.

The program in partnership with eBay and its PayPal unit will offer cash back to consumers who search on Microsoft Live and make a purchase. The announcement will be made in conjunction with a taped message from eBay CEO John Donahoe. The technology is based on the acquisition of Jellyfish by Microsoft in September, 2007.

The announcement is expected to be made by Satya Nadella, SVP Search, portal & Advertising Platform Group, Microsoft, prior to Bill Gates’ presentation on “Connecting the Future.” The goal is to differentiate Microsoft’s vertical search experience for users while leveraging improvements in the core search algorithm.

Microsoft believes the Live Search Cash Back program will align the interests of consumers and the search engine, putting Microsoft “on the same side as the consumer.”

The job of Live Search will be to match the most relevant products with the most relevant consumers.

Microsoft will likely offer advertisers a CPA (Cost-Per-Acquisition) model rather than a traditional search engine Cost-Per-Click (CPC) auction.

Tony Hsieh, CEO of Zappos, said in a taped interview that the program would help overcome the barriers of first-time buyers of shoes online.

A Barnes & Noble executive stated that clickthrough rates and purchases had increased through the use of the Jellyfish pilot program.

The following message is posted on the Jellyfish.com Web site:

“As part of our pledge to save you money on the products you buy, our Cash Back rewards service is currently offline to perform necessary service upgrades and enhancements. Jellyfish Account holders will receive an e-mail notification when our Cash Back service is up and running again. Thanks for your patience.Using Jellyfish, consumers could compare prices of products from a number of online stores. Retailers paid Jellyfish fees to feature products. A portion of that fee was refunded to consumers who bought through the Jellyfish site.

Jellyfish also offered “Smack Auctions.” During each Smack show, Jellyfish would auction off new products in a unique price dropping format. Every second that ticks off the clock, Jellyfish would drop the price of the product, until the deal sold out.

Jellyfish founder Brian Wiegand is agroup manager at Microsoft. Last year, ye stated, Microsoft is “investing heavily in shopping and e-commerce.”

Microsoft closed the deal on Sept. 27, 2007 but didn’t announce it until Oct. 2, 2007.

This isn’t the first foray of Microsoft into the world of search engine incentives.

Microsoft Live Club is an ongoing experiment with incentivizing searchers but never on the Live Search Cash Back scale. For example, Microsoft Live Search Club lets users play games. A completed gives earns tickets toward prizes, such as Zune accessories, song downloads and ringtones.

Microsoft’s official statement on the announcement:

On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.