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Microsoft's new acquisition Ciao! combines online shopping and price comparisons with social networking. Some see the acquisition as part of an effort from Microsoft to stave off a Google search monopoly.  (Source: DailyTech)
Via its recent acquisition of Ciao and its cashback program, Microsoft is offering searchers financial rewards

It’s no secret that Microsoft is a distant third behind Google and floundering competitor Yahoo in the search engine business.  With Google constantly expanding its online offerings, Microsoft has turned to tactics that either smack of desperation or perhaps of brilliance, depending on your perspective.  Microsoft is in-effect paying users for their search engine traffic.

The tactic started with the acquisition of the unusual search/auction site last year.  Jellyfish allows users to search for products.  Each product has a commission associated with it, similar to the retail markup at stores such as Best Buy.  However, Jellyfish turns around and gives users a percentage of that commission back as savings, as a reward for searching with it.

This way Jellyfish essentially gives users money for search advertisements and traffic, deposited straight to their PayPal account.  The higher the commission percentage on similarly priced varieties of the same item, the higher the ranking in the search, as the customer will get more money back.  The approach is not wholly new for Microsoft -- it already tried to pay off businesses for search traffic.

In order to more fully promote its new Windows Live Cashback program, part of its new campaign aimed at seizing web traffic, Microsoft was offering big cashback rewards.  Users could sign up for a Live account and in a limited time partnership with online auction site eBay receive a percentage of cashback on purchases.  Customers received up to $250 on up to 6 purchases (this was recently increased from 3).  The percentages were as high as 35 percent at one point through eBay’s site. 

After launching the cashback program in May, Microsoft saw a short term jump from 8.5 percent to 9.2 percent.  However, the share slipped back to 8.9 percent in July.  Many in the tech news community have said that they took advantage of Microsoft's eBay deals and then never touched Live search again, returning to the tried and true Google search instead, a seemingly common response.

With Google sporting a Herculean 62 percent search engine share in the U.S. and higher shares abroad, such as 75 percent in the U.K., some reports indicate that Microsoft's efforts are merely defensive measures to try to stave off a Google search monopoly.  In order to further these efforts, Microsoft has now acquired shopping comparison site Ciao.

Ciao, unlike Jellyfish, derives its revenue from traditional advertisements, instead of commissions.  However, Ciao offers social networking components, which can be used to possibly interface shopping to such sites as Facebook or MySpace.  Microsoft is paying a cool $486M USD in cash to acquire Greenfield Online, owners of the site.

A Microsoft spokesperson describes, "Ciao is definitely part of the effort to extend Cashback.  It will be a market-by-market rollout. We will be working closely with Ciao to assess each market individually on the presence of local online merchants and the maturity of local e-commerce activity.  Integrating Ciao's capabilities into Live Search will provide a strong launch pad for our commercial search offer in Europe and enhance our e-commerce offering on MSN.  This makes the company a fantastic asset to the future of our search offer."

Analysts are somewhat critical of the move.  First, some criticize that Microsoft plans to sell off the market research business of Greenfield Online.  They argue that this unit is very valuable when paired with the Ciao site, and splitting up the pairing will weaken both offerings.

Secondly, many analysts are expressing opinions that the move will do little to hold off a Google search monopoly.  Writes Google Watch's Chris Boulton:

Right now, there are enough e-commerce sites to parallel the properties of the Monopoly board game a few times over. In Jellyfish, Microsoft plucked an Atlantic Avenue. With Ciao, Microsoft has acquired Marvin Gardens. 

The sad thing is, while this might seem like a clever strategy, all Microsoft's acquiring will do is keep Google from owning 75, 80 or 85 percent of the search market. Indeed, Live Search Cashback is just not getting it done for Microsoft in the early going.

Some analysts are commenting that the move may only serve to provoke Google into buying up several larger search properties, consolidating the market.  Such an outcome would represent a serious backfire of Microsoft's plans if analysts correctly identify its intentions as try to hold back market share from Google.  Says Boulton, "Indeed, Microsoft's moves may just inspire Google to buy its own Park Place or Boardwalk in the great Monopoly game of search."

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Microsoft is paying you to search.........
By theapparition on 9/2/2008 3:03:24 PM , Rating: 5
Since Microsoft is trying out a new search engine, they need people to try it out. Please send this email to everyone you know, and Bill Gates will send you a check.

This is not a joke. I just got my check the other day. Bill delivered it himself. We had tea and krumpts and talked about the weather. But MS will only pay for searching for so long. Now quick, forward this to everyone of your contacts.

^^^for anyone who didn't get it.

By phazers on 9/2/2008 3:53:21 PM , Rating: 5
We had tea and krumpts

You might want to visit your proctologist and get those "krumpts" looked at :).

By feelingshorter on 9/2/2008 5:14:33 PM , Rating: 2
Thats one way to look at it but its a great idea from MS. There are websites such as (and others) that also gives you cashback basically for buying stuff through their website link, is anyone complaining about that? Say you want to buy something from, go through fatwallet and save 1%.Its the same thing as MS is doing. MS even gives more % back than fatwallet for the most part.

Live search gives 3% cashback on Buy a $1200 computer and thats $36 dollars. The only reason why i go back to google is cuz my email is already there, not because google's search is much better than live/yahoo. Its almost all the same to me by now.

By Mojo the Monkey on 9/3/2008 9:41:05 AM , Rating: 3
I would love nothing more than to use the underdogs site/product. )There is no rationality to my preference, and I know that, but its besides the point.) I even tried making that new engine "cuil" my default page... but it didnt last. I like the idea, but the algorithms just dont bring up the first 4-5 things I would want/expect to see at all. Google's search just seems to find what I want on the first attempt, and all the rest (although I havent been back to Yahoo in a while) just take longer to use.

Is this post implying that Live Search is new (as in the last 1 week)?

I know Microsoft would never do this...
By Ryanman on 9/2/2008 4:17:53 PM , Rating: 2
But with Google's market share already incredibly dominant (their search algorithms just beat the hell out of Yahoo/Live's, Google's been my homepage for years now...) Why not let them get a monopoly, and then get them prosecuted for it? Might seem a little stupid, but I've never really heard ANYONE profess their love for any search engine over google.

RE: I know Microsoft would never do this...
By Proxes on 9/2/2008 5:22:11 PM , Rating: 2
What was that one search site the ex-google employee chick started? I forgot.

RE: I know Microsoft would never do this...
By kickwormjoe on 9/2/2008 5:32:19 PM , Rating: 2
RE: I know Microsoft would never do this...
By kilkennycat on 9/3/2008 4:02:25 AM , Rating: 2
... Cuil is a great search site.... Tried it again after a few weeks absence. First try, entered '8800GT'. Drew a total blank. Back to Google.

By Mojo the Monkey on 9/3/2008 9:42:38 AM , Rating: 2
I agree, I liked the concept of CUIL and was excited to see something new by [alleged] innovators. WRONG. The product sucks (in its current form, at least).

By Ryanman on 9/3/2008 12:46:42 PM , Rating: 2
LOL you're right. Nothing on the 8800 on there.

I'll give credit though, it looks pretty nice. And they don't have the net-crawling horsepower Google does. But the fact remains, a search engine like that is gonna be useless to me.

That picture of Ballmer....
By 67STANG on 9/2/2008 2:23:24 PM , Rating: 2
looks like he's "opening up" for Larry Page and Sergey Brin.

Oh well, I guess if you can't convince people to use your search service, might was well try to bribe them... Well done MS.

By amandahugnkiss on 9/2/2008 2:54:12 PM , Rating: 3
bribing them, just like the $10 cash back for using Google Checkout.

By 7aw7 on 9/2/2008 11:58:59 PM , Rating: 2
RE: Wryyyyyy
By dflynchimp on 9/3/2008 1:00:12 AM , Rating: 2
I don't know what's worse, the image or the fact that I loled at it

Wow...old news
By Spivonious on 9/2/2008 5:39:34 PM , Rating: 2
This promo has been going on for at least two months now. I guess there was never a big press release about it?

Live Search Club
By OddTSi on 9/2/2008 5:53:37 PM , Rating: 2
One Microsoft effort to pay people for search traffic that wasn't mentioned in the article is the Live Search Club.

Isn't this old news
By The0ne on 9/2/2008 6:25:14 PM , Rating: 2
I'm a bargain gadget hunter myself and have seen and used this for several weeks now. Isn't this old news? I'm not seeing anything new. Oh well :)

By foxtrot9 on 9/3/2008 1:37:35 PM , Rating: 2
I bought something on cashback a few months ago and ended up returning the product...funny thing is I still got my cashback for it when it became unlocked. Take that MS!

available in canada?
By loopandjump on 9/3/2008 4:05:31 PM , Rating: 2
Does this work in Canada as well?
I tried but the site didn't give me any link with cashback!

This is news ?
By chick0n on 9/3/08, Rating: 0
"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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