If there's one thing that the Microsoft-Yahoo off-again, on-again love affair has laid bare, it's how badly Microsoft blundered its mid-'90s search and advertising advantage. Feeling the need to prove its competence with search, Microsoft tried to convince investors that they can do better, with or without Yahoo, through a big announcement on Wednesday. They unveiled a clever new advertising innovation that, at a minimum, shows they're committed to thinking creatively about monetizing search. Of course, that matters only if the feature actually works.
The new program is called Live Search cashback, and it's built upon a clever business model. (No, the C in cashback is not capitalized. That's how Microsoft is insisting on writing it. Blame e.e. cummings.) Search for a product through LSc to compare prices on any item you can imagine—everything from obscure hiking socks to under-the-radar fiction. On top of a routine price comparison, though, is an extra goodie: cashback savings, usually between 4 percent and 8 percent of the pretax price.
Once you find a price and item to your liking, you click through to the retailer, enter your e-mail address for Microsoft to track your discount earnings, and buy the item from the retailer's Web site. Microsoft then credits your cashback account, and once you accumulate at least $5 of savings, you can cash out. Microsoft says it has partnered with 700 different merchants, all of whom are eager to capitalize on the estimated 68 percent of online
