Microsoft counters Google with Live Search

Microsoft is announcing the launch of their new search service, “Live Search Cash back”, a set of 18 vertical search offerings that will give cash back to users after purchasing from advertisers.

The technology of the new search service is based on Microsoft’s earlier acquisition of Jellyfish in September 2007. Using Jellyfish, consumers could compare prices of products from a number of online stores. Retailers paid Jellyfish fees to feature products. A portion of that fee was refunded to consumers who bought through the Jellyfish site.

With Live Search Cash Back Microsoft seeks to turn high value searches away from rival Google, by attracting the people who actually search to buy something. These searches are most valuable and with the promise to give cash back after purchasing, Microsofts definitely wants to be on the side of the consumer.

As for advertisers, the Microsoft CPA (Cost-Per-Acquisition) model carries less risk than Google’s Pay-per-click model where a purchase is not certain after the ad was clicked. Among the big e-commerce companies involved in the project feature and Barnes & Nobles. They have stressed the positive influence of the program on first time buyers and achieved higher click-throughs and purchases while using the Jellyfish pilot program.

For many the launch of Live Search means a relief from the current perceived virtual monopoly of Google in internet advertising space. So even without a merger with Yahoo, Microsoft might be well received by online advertisers, looking forward to spread risks.

To be continued!


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