In its bid to make a dent in Google’s search advertising dominance, Microsoft is turning to a new weapon—cold, hard cash.

The software maker’s new Live Search Cashback program will give consumers cash rebates on specified products bought through its live.com search service.

Microsoft is a distant third in search advertising behind a dominant Google and Yahoo, which has so far parried Microsoft’s efforts to acquire all or part of the company.
The Cashback program, launched Wednesday, is an effort to stir consumer interest in Microsoft’s search by providing rebates on purchases through scores of major online retailers like shoe retailer zappos.com (9 percent), bookseller Barnes & Noble (6 percent), and electronics merchant newegg.com (2.7 percent).

The rebate program, under which merchants pay for search listings based on consumer actions rather than clicks, was pioneered by jellyfish.com, a Wisconsin startup that Microsoft acquired in 2007.

In March, Google sites accounted for 59.8 percent of U.S. searches, according to market tracker comScore. That compares to 21.3 percent for Yahoo and 9.4 percent for Microsoft.

In late morning trading, shares of Microsoft edged up $.09, or .3 percent, to $28.85. As of March 31, Microsoft was sitting on cash and short-term investments worth $26.3 billion.


Microsoft is far from the first company to use cash to promote its search engine. iWon.com, now part of  IAC/InterActiveCorp., offers cash sweepstakes and other prizes for performing Internet searches and other actions.

Microsoft said users of Live Search Cashback, “The Search That Pays You Back,” can have the money deposited in their PayPal accounts for sent via check once the total exceeds $5.

Initially, at least, the program is available only to U.S. residents who create a Windows Live ID and cashback account.

After backing away from an offer of $33 per share for Yahoo on May 3, Redmond, Washington-based Microsoft reportedly has floated a new proposal under which it would acquire Yahoo’s search business and a minority stake in the rest of the company after its Asian assets were sold.