New From Microsoft: Live Search SearchGimmick!
Microsoft’s Live Search Cashback–“The Search That Pays You Back!”–must have had at least some short-term positive effect on Microsoft’s search business because the company is augmenting it with another rewards program. Now, in addition to receiving Cashback rebates on certain purchases of products found through Microsoft’s live.com Web search, users can win prizes as well. The company’s new SearchPerks rewards program awards Live Search users points for every Live Search query. And those points can later be redeemed for prizes like ringtones and Xbox games, or donated to charity.
Quite a gimmick, though Live Search Senior Director Frederick Savoye says SearchPerks, like Cashback, is actually part of Microsoft’s (MSFT) grand plan to “innovate the [search] business model.” If that’s so, the company might want to rethink it. Because Cashback really hasn’t done much to bolster Microsoft’s laggard search service, which remains a very distant third in the search market. According to Nielsen Online’s MegaView search ranking for August, searches on MSN/Windows Live declined 23.8 percent year-over-year. Its August 2008 share of the search market: 10.7 percent.
A 23.8 percent YoY fall in searches doesn’t seem like much of an innovation to the search business model. And with its search market share in decline, Microsoft clearly needs something more than a steady stream of gimmicks to stem the bleeding. Said Collins Stewart Internet analyst Sandeep Aggarwal: “Internal initiatives at [Microsoft] need time to lift off and prove their merit, but sooner or later the company will have to face the realities and decide again if a combination with [Yahoo] can speed the process.”