Microsoft To Pay People To Search

kolicha writes "After the failed Yahoo bid, Microsoft is going to try a new approach to gain market share on their rivals Google. Sponsored links will be pay per purchase rather than pay per click, and search users will be offered 'cash back' on their purchases."

Nope, sorry.

[Perseid]

This will get them some temporary hype. This will get them more activity - but only of people specifically looking for discounts. This isn't going to make them more popular as a search engine. The only way to do that is to make the better search engine.

Re:DO IT! DO IT! Do It 'til You're SATISFIED...

[Anonymous Coward]

This has got to be one of the most bizarre anti-Microsoft rants I've ever seen on Slashdot, beating out even that "consult/trust in yOUR creators" guy. Grats.

Following a trend

[transporter_ii]

Sell xboxes at a loss, pay people to search; the next thing you know, they will be paying vendors to put a stripped down version of XP onto mini-notebooks. In Google's case, they could afford to fork over some money to searchers, too. But Linux couldn't compete if it had to pay the vendors. So that's how MS competes with free and/or better stuff, buy them off.

Product Search

[Fritzed]

Unless they are implementing a very good product search to compete with Google Shopping, I don't see the appeal and I don't think that product searches drive the general search market.

On top of that, everyone thinks of themselves as "the type of person who doesn't click on ads (well except for that one time)"

This feature is marketed at a group of people who are going to plan at looking at the ads when searching to find out if they can get a deal. I don't think that group of people really exists.

Re:Nope, sorry.

[Darkness404]

Exactly, Google offers the same service but very few people search through that (of course Google's is without discounts). MS has an ability to beat Google by offering something different, but all MSN/Live has done is make a rather poor clone of Yahoo! Which many people switched to Google because they didn't like Yahoo!. There is little to no incentive to moving your home page away from Yahoo! and to MSN/Live search because it offers nothing more, while Google has an entire different layout (no ads, clean, but can be customized).

Re:Following a trend

[wal9001]

They should just cut to the chase and pay google to redirect some percent of users to MSN search results.

Most of you aren't really getting the point.

[BlueStile]

Out of all the searches that occur, a small handful are the true moneymakers. When you search Google for "British prime ministers" the resulting ads are not very profitable to them. In fact, some searches are so unprofitable and clearly just information seeking, that Google will not even display ads at all.

The important searches are things like "Best Digital Camera," "Kelly Blue Book BMW 325i," "The Da Vinci Code," and so on. These are searches that are very likely to result in a sale.

What MSFT is doing doesn't seem that innovative because it's so obvious - but no one is doing it.

Think of club promotors on sidewalks in NYC or Vegas or whatever. Typical entry is let's say cover of $10. But if you take a stupid little card from someone advertising the club, maybe that gets you free entry. Why? No reason, you aren't special, just you happened to pick up the advertisement. The club is paying the promotor to offer you a discount, so that you eventually buy the real product (drinks at the club, or whatnot).

So if the marginal profit on a $400 digital camera is about (total guess) $150 bucks, and MSFT only demands the advertiser pay a cost per action, then that's $150 dollars of value that can be shared by a) Sony/Canon/whoever, b) Microsoft, and c) the USER!

The point here is that it doesn't even matter if Google offers better search now! Going forward, I'll probably product search/research on Google, but go over to Microsoft to make the all-important final decision (because it's plainly the rational decision - my product WILL be cheaper)!

If people pay attention, instead of throwing it out the window, this could be a gamechanger - it isn't the same as BigWallet, which essentially just shared the already offered referral deals with you (half a percent of the sale, usually). This could be a significant deal for everyone involved. Cost per action payment is the key.

why not make a good product and sell it?

[acvh]

seriously. Microsoft is a software company. What is the reason for their obsession with the search and advertising market? Last time I looked they are making money. Is it just because they want to take revenue away from Google?

I know, corporations exist to make money. But they don't have to go so far from their core competency (spare us the snarky comments) to do it. My heating oil provider doesn't have an internet search engine. My insurance company isn't creating web 2.0 video applications. Stick with what you're good at.

Re:Nope, sorry.

[clampolo]

all MSN/Live has done is make a rather poor clone of Yahoo

Just a slight correction to what you are saying. www.msn.com looks like Yahoo! but they also run www.live.com which is meant to mimic the google style. Microsoft marketing is confusing and uses the term "live" for their search engine and for their online endeavors.

Re:Most of you aren't really getting the point.

[aleph42]

So if the marginal profit on a $400 digital camera is about (total guess) $150 bucks, and MSFT only demands the advertiser pay a cost per action, then that's $150 dollars of value that can be shared by a) Sony/Canon/whoever, b) Microsoft, and c) the USER!

The point here is that it doesn't even matter if Google offers better search now! Going forward, I'll probably product search/research on Google, but go over to Microsoft to make the all-important final decision (because it's plainly the rational decision - my product WILL be cheaper)!

This probably won't work; the camera would have to be advertised on micorsoft's search for this; and if it is, it will probably be more expensive than from the shop you found from google's search, which already refunds money from google, in the sense that the company didn't pay for that link. Google is effectively refunding 100% of it's margin on that link, since it is not advertisment!

You are confusing search results and advertisments near the search results; microsoft is saying it will offer better advertisments; but no one chooses where to shop, or what newspaper to read, for the advertisments! In that case you would just head to a discount hunting website.

No, you choose your search engine based on the better results, and then, you don't mind that the website profit from the 1% of attention you have to spare to look at an ad. Ads make money when you don't mind to shop without really comparing anything.

it isn't the same as BigWallet, which essentially just shared the already offered referral deals with you (half a percent of the sale, usually).

Who said that this rebate to microsoft's users will be more than half a percent? Did the guys who got paid to surf the internet with extra ads make a lot of money?

Re:Nope, sorry.

[Mongoose Disciple]

The only way to do that is to make the better search engine.

Honestly, I don't think that'd even do it anymore, unless it was somehow ridiculously better.

Google's been dominant for so long that its cultural inertia value would carry it a long, long way even if someone else came up with a better search tomorrow -- not that I expect Microsoft to do that.

Objective

[mqduck]

Back in the last related story, lots of people were asking what kind of capital (in not so many words) Microsoft would gain by purchasing Yahoo or a part of it. This story should remind those people of the answer to their question.

Microsoft is not thinking about income in any sort of immediate sense. Microsoft, from the very beginning, has made sure to have a central presence in whatever the center of PC technology is at any given time. This is a continuation of what Microsoft has done/been since it's origin, not a case of looking for immediate revenue.

When you have $30 billion in the bank

[patio11]

... you can afford to do two, nay, three things at once!

Seriously though -- Microsoft is close to saturation of their two big moneymakers, Windows and Office, throughout the Western world. They can continue milking them for years via the upgrade cycle and expanding the share elsewhere, and they will, but just doing that doesn't put up the big numbers. So they're going to constantly try going after new markets and, eventually they think, they're going to succeed big in one. Like, "What do you mean Apple Computers makes MP3 players?! They're a computer company!" big.

And then they're going to take that success and do exactly what Apple did with the iPod -- tie it straight back into The Empire, and make megabucks. iTunes is already just a marketing expense to sell iPods and iPods are eventually going to be just a PR campaign to sell Macs which happens to generate a few dollars on the side.

And if this idea, or the XBox, or MSN, or the Zune, or that new touch screen table, or a thousand ideas fail -- so what? They've got $30 billion in the bank, patience, and a certain bit of maniacal efficiency in their favor. Sooner or later, they'll find their iPod.

Re:why not make a good product and sell it?

[Anonymous Coward]

Because they realize, especially now with all the online office suites, that things are moving away from the desktop, to the web. Since search is a big part of that, and they already have a decent office suite, they are starting to port things over to a server/client model instead of a bunch of standalone/(eventually-)interdependent apps. They're just looking out for their long-term profit.

I still don't think this is going to work, though.

Re:Jellyfish

[blind biker]

The answer is staring you in the eyes: MS or even Google doesn't necessarily care how much searches you do on their site - what they make money on is the clicks on their ads. If you only search on Google but then make the purchase on Microsoft (simplifying the language here), advertisers won't pay Google but Microsoft. Microsoft wins.

Re:Nope, sorry.

[kestasjk]

The same could have been said for hotmail, yahoo! mail, and the other free email programs, yet gmail continues to gain market share. It's not dominant, but it's carving an ever-increasing niche.

But gmail really is "ridiculously better" than hotmail. I switched the moment I first got my gmail account; 1GB of mail instead of 2MB, no spam instead of constant spam, a nice interface, threading (hotmail had no threading at the time), tagging, good search, long email retention, a viral invite system which has never been pulled off so successfully before or since, etc, etc.

It really was worlds away from the competition, and I don't think they would have taken over like they did without a huge edge.

Re:Nope, sorry.

[JohnBailey]

Google's been dominant for so long that its cultural inertia value would carry it a long, long way even if someone else came up with a better search tomorrow -- not that I expect Microsoft to do that.

Don't be so sure. The Internet is a very fickle market. Today's hot property is tomorrows old news. It used to be that almost everyone used chat rooms, now not so much. Then social networking sites sprung up, but even they are getting old now. Tomorrow... Who knows. All it takes is for a new engine to offer something with a feature that Google doesn't yet have and if enough buzz is generated, then Google starts looking a bit ill. I use Google quite a bit, but if something better came along, I can guarantee that I would be out of there with no hesitation. It might take more than a better search engine, but nothing is keeping me at Google but my choice to use their easily replaced services. It's just a search engine and a few other web based apps, so someone else can just as easily offer me the same services, and I'll go there instead.