This isn’t enough data to declare Microsoft’s much derided Live Cashback search product a winner, but the first full month after it launched (June) shows a 15% gain in search volume v. the previous month, according to Comscore. This erases the previous month’s losses, bringing Microsoft up to 9.2% overall search share.
Live Search CashBack gives advertisers the option of offering users a direct rebate for purchases made after searching on Microsoft. The product shifts search advertising from cost-per-click (CPC) to cost-per-action (CPA) and give a lot of the revenue back to users.
Live Search Cashback isn’t designed to grab a ton of market share away from Google and Yahoo, but Microsoft is hopeful that more users will come to them when doing searches around buying goods online. And those queries tend to bring in the lion’s share of advertising dollars. This won’t affect Microsoft’s bottom line much, of course, since they are passing most of the money from purchases right back to consumers.
This is far from a definitive statement of Live Search Cashback’s success as an ongoing product, but the jump is an early sign that consumers may be intrigued. Let the debates continue.
So they went from an 8.5% share to 9.2%? That doesn’t sound like much of an accomplishment.
1% gain means more than $1 billion dollars gain in search market , so it is quite an accomplishment.
Where do you get 1% = $1B from??!?!
Google has about a 60+% share, and generated Q1 earnings of $5.2B, only part of which came from search ad serves. So even being extremely generous (since MSFT is behind on search monetization by as much as 1/2), and not knowing the exact portion of search revenue in the Google numbers, 4 x $4.5B = $18B / 60 = 300 Million.
I regard this as mostly a blip, given that MSFT had touted this as a game changer. Let’s see what July ComScores tell us, after everyone had the chance to look and see for themselves that Google listings still have lower prices:
Repeated comparisons of LSCB and Google results (PPC sponsored results and free Google Products listings) have shown Google to present better price offerings most of the time, minus the inconvenience of MSFT holding your “discount cashback” in escrow for you for 2 months.
Latest example I just looked up randomly:
Canon EOS Digital Rebel XT SLR Camera with EF-S 18-55mm f/3.5-5.6 USM (second item shown within LSCB for “Canon Camera”)
LSCB lowest price: $479
Google search for the exact term used by LCSB:
$419 @ FotoConnection.com,
#3 ad shown, stated price is $329 (for camera body only), $419 with the lense + memory + tripod package deal.
LSCB could have wasted you $60 or more. Plus you would be waiting on another $10 “cashback”… great (BTW, who at MSFT came up with the silly lowercase spelling and thought this was somehow cool?!?).
Do your own tests, you’ll find that 50-75% of the time, Google is cheaper even without the gimmick.
its a heck of a 1 month jump
Could be, but such a fluctuation could be random, too. The Comscore numbers aren´t that good. Its not a good idea to just analyse 1 or 2 months, lets see which change the next 2-3 month are bringing.
As a Google spokesperson said: “we welcome competition that stimulates innovation and provides users with more choices. Having great competitors is a huge benefit to us and everyone in the search space.” You can translate that into:maybe that will stop the Supreme Court from ruling that we have a search monopoly.
Not sure about the billion dollar figure, but I see where you guys are coming from.
Isnt some of that due to Club live being counted also?
PayPerPost alert!
From 100 to 115 M$ employees , that’s an improvement!
http://fudnews.slinkset.com
How much of the 15% volume growth is attributable to the eBay 35% deal?
http://www.cent...cashback-update
Cashback simply removes one of the largest costs of etailers: returns/ chargebacks
You don’t get “cashback” until 60 days later, conveniently after the ‘challenge period’ for most credit cards.
I disagree with other comm enters. Michael is right- if these numbers hold up, then Microsoft’s program looks like a real success.
If I remember correctly, in 2000 George Bush waved dollar bills when touting his planned tax cuts on the campaign trail. This kind of gimmick may not work in slicon vallley or nyc, but it does in most parts of the country.
Doesn’t seem like too much of an increase..? http://blabtech.blogspot.com
This is a gimmick and most people are too smart to fall for even that. People care about quality not a few pennies.
Wal-Mart seems to do pretty well; a lot of people do care about those pennies. There’s plenty of people looking for opportunities to save a buck.
I think a good percentage is from the media coverage for the latest LIVE.COM improvements. In this area Techcrunch has its share.
But after all, this means that the service is important and any new feature is worth trying.
Anyway, GO MS
Sounds like MS has finally made a positive step in the search business!
I agree and with a serious Adsense killer it will be even more exciting. MS finally understood.
I think 1% increase in the market share is kinds of success. But if we consider how much Microsoft have spent on the cash back, maybe it is not so successful at all. I know MS has tons of cash, but it cannot last long. Just don’t think Microsoft will be able to provide 20-30% cash back all the time. Do you guys still remember the Shopping.com cash back program? It died finally.
Maybe cash back is good for some website, like ebates, fatwallet.com, DealDigs.com…. but not for big guys.
the only reason people used live search was for the deals, after they got their discount, they went right on back to using Google
really? but what about linux? it`s even Free, but people use Windows.
I assume you were trying to reply to me. Linux is too hard to use for most adopters; hell, even Windows is too hard to use for some people (that’s why the buy Macs.) So that’s not really a fair comparison of cost because the ease of use varies so much between platforms. Cost isn’t the only factor.
Google and Windows Live search return virtually the same search results – the difference in quality isn’t significant (for average joes)
http://www.cs.u.../2006-2007.html
Search is a commodity – when someone offers “pennies off” the commodity there’s no reason not to use it. I use Live Search and Google and the only reason why I’d pick one over the other is because of all of the other Google services that I use.
So if cost isn’t a factor, explain Wal-Mart’s success then? Why do people go to Wal-Mart instead of a comparably more expensive retailer like Target?
That’s what MS want: search Google for free, and make deal at MS
Great idea.
Blog with news: tinyurl.com/liviux
Does everyone understand that the listings on this “search” shopping site are all “paid” listings? It is not a replacement for the regular MS search engine – only businesses with advertising agreements are displayed on the site.
The value to the retailer is that they only pay if a user clicks through from the live.com site and then completes a purchase – referred to as pay-per-action. The selling point to retailers is that it eliminates click fraud, and as Frank Church pointed out above, the cashback to the end user doesn’t happen until 60 days out so fraud is eliminated on that end as well.
I have used the pre-cursor to this site (jellyfish.com) to make 5 or 6 purchases and averaged about 10% back on those items. And keep in mind that Jellyfish (now part of Microsoft) kept the other 10%, so most of the businesses were paying 20% of the purchase price – a fee of $75 to $100 for most of the purchases I made.
As a result, if Microsoft can drive even a small amount of traffic through listings that result in purchases, the end result could be significant revenue (in terms of $ per user) in the long run.
Should be interesting to watch, especially given reports that up to 20% of all paid clicks for Google are fradulent – big advertisers aren’t going to want to continue to throw 20% of their ad budget away, especially if the economy continues it’s current path.
Just to clarify, microsoft aren’t keeping any of the cashback in this deal. They are passing 100% on to the customer, not making a single penny from the cpa. The business logic behind this is that the search has not been made on google so google has not profited from the click. This devalues the bid on google as advertisers are willing to pay less in cpc to google because the end result is less sales from the adverts.
Microsoft will also be benefiting from the cpc ads that are displayed along with the cpa search results.
Don’t you remember the AOL/Microsoft viral e-mail promising zillions if it was forwarded to everyone in the world that went around a few years ago, and continues to pop up even now?
I imagine a lot of the same people who bought into that, in spite of the fact that AOL and Microsoft were suing each other over Netscape/IE issues at the time, will buy into this.
I avoid Microsoft products as much as possible, as I actively dislike their “does not work and play well with others, even itself” marketing strategy for the Vista line. I imagine the same dysfunctional marketing team came up with this “So what if you have lots of friends. I can buy my own!” approach.
This types of stories are great press, but the real question is if they are sustainable. When that happens, I believe advertisers will look for ways to shift more dollars to Live Search.
It would be good to see what verticals their searches are bucketed under because I’m not really sure what kind of user uses Live Search but their conversion rates are great.
Why is Microsoft so late to market with this new monetization feature. AdSense has been chugging along earning ridiculous amounts of revenues for quite some time. They are so late to market that I don’t think it will make much of an impact. The only possible way it could is based off the percentage they are giving back to the publishers. Google’s rate are ridiculous. Maybe increased competition between the giants will result in putting more money back in the pocket of the publishers… WHOO HOO
Mike
http://www.read...ex.php?RTA=web2
I think MS is the only company that can potentially make a serious dent in Google’s online business and search domination .. they certainly seem to be moving in the right direction .. their results are alot more relevant and also the SE seems to be alot faster than it used to be ..
I like live … though its hard to switch from google~
Live search sucks. Yahoo search is close to google.
I think the live search cashback is a pretty good move, it sets the margins for pay per action ads at 0 (the consumer receives the entire rebate from the company currently).
If you want to see how this might affect google, listen to the comments from Bob Swan on the earnings call from ebay where he talks about increasing coupon (live search) spend and a corresponding reduction in marketing (adwords).
i understand that cashback is still in beta and all its features have not been rolled out… if this is what MSFT can do in 1 month- GOOG’s days of dominance might be numbered…
and frankly speaking- I am happy that someone has taken the gauntlet to teach the those employee daycare hating-party boeing flying a#* a lesson!
GOOG is a 1 trick pony!
Missing EPS for Q2 plus this news! Man I am betting we would see stock tank to 400 on Monday
Sell!! Sell!!
The new comment design is so confusing
Now steve Ballmer has a reason to smile
Its good to see that live cashback is a bit different from Google but having said I think its early days the high traffic could be for people trying to see how it works.
The point is that they did something that moved the needle. It’s easy to take potshots at it, clearly this alone isn’t going to be what will get them to catch-up, but as Michael points out, it is a significant one month increase, and it’s due to a business model innovation not a technical one, which is fascinating.
Funny to see people again slagging this despite a positive early result. The discussion on Techcrunch comments was so predominantly negative when this was announced. Obviously this is only a first indication but its a move in the right direction.
It would be interesting to see the composition of this 15% as well. With this feature Microsoft was targeting a smaller number of high value searches so it would be interesting to see if the increase is in this area. If so, this could be a much bigger impact on google’s profits than it looks like.
One to keep watching. For those who keep going on about this not being sustainable and only being about pennies, three points. Cashback is a hugely popular model in the UK – http://www.quidco.com. Its not just about pennies (120 quid for home insurance, 130 for a mobile). And finally, Microsoft are not targeting silicon valley with this. Its for the average Joe who wants to get a bargain, just because you personally wouldn’t use it doesn’t mean others wouldn’t.
Cash back or not i think its time microsoft shuts shop after decades of monopoly
15%??!!?? Now that’s fairly high. Congratulations then to Microsoft. I hope this soaring of searches won’t be for now only.
Rebates like profit sharing with employees tend to only provide short term benefits.
Live Search have a long way to go. I have conducted research on Usability and creating a compelling experience (by creating flow) on a website looking at Live Search.
Live Search should be focusing on their usability and be striving for creating a compelling experience so that new users will stick. Rather than going.
I think consumers who do care of price will search for low prices first (where Google might have advantage) and then coupons. If Live result price is high, even with cash back, the price could still be higher than some sites, so we shall see. It is not like $10 cash Google checkout did, where consumer win for sure.
I think it’s a good idea, we’ll see how well it performs further down the track though. Some healthy competition would be good for Google, it would hopefully mean better products for us.
CPA is the new model. Google is just riding the wave right now .. until they realize nobody wants to pay for their CPC model. CPA is where all advertisers are going to turn. And that’s what’s fair for advertisers.
If the Microsoft search engine was as accurate with their results as Google they would not have to go to the cash back marketing tactic.
nice
Good to see someone besides google doing well in the search arena..hope they get some more market share to balance the power.
thnks
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