Search Gamble May Just Work for Microsoft

'Desperate,' 'brilliant' cash-back plan will sap Google's base
By Kevin Spak,  Newser Staff
Posted May 22, 2008 1:38 PM CDT
Search Gamble May Just Work for Microsoft
Microsoft Chairman Bill Gates speaks during the Microsoft advance08 Advertising Leadership Forum at the company's campus in Redmond, Wash., Wednesday May 21, 2008.   (AP Photo/Stephen Brashear)

Many are pooh-poohing Microsoft’s cash-back search scheme, but Michael Arrington of TechCrunch thinks it’s going to work—and be a major pain in Google’s side. With search-market share at a mere 9.1% (and falling), Microsoft has little to lose, Arrington argues, because search is a winner-takes-most proposition. If customers respond to bribery—and history suggests they will—Microsoft could widen its pie piece.

True, the system only works for e-commerce, “but frankly that is all that matters,” Arrington argues, because 80% of search revenue comes from e-commerce. Microsoft won’t make much money, since it’s giving that revenue back to customers, but it will swiftly hurt Google’s core business. “Sometimes, desperation is a good place to be,” Arrington concludes. “It forces you to try crazy stuff.” (More Microsoft Live Search stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.