Microsoft opens search engine wars with cash back?

The spin from the Windows Live group in Redmond is that this is getting cash back for purchases initiated through search. The devil’s in the details. I believe this will end as more of an assault of shopping engines than search engines. Google pretty much started that assault with Froogle, that’s now consolidated into their main search and shopping.

The program in partnership with eBay and its PayPal unit will offer cash back to consumers who search on Microsoft Live and make a purchase. The announcement will be made in conjunction with a taped message from eBay CEO John Donahoe. The technology is based on the acquisition of Jellyfish by Microsoft in September, 2007.

The announcement is expected to be made by Satya Nadella, SVP Search, portal & Advertising Platform Group, Microsoft, prior to Bill Gates’ presentation on “Connecting the Future.” The goal is to differentiate Microsoft’s vertical search experience for users while leveraging improvements in the core search algorithm.

Microsoft believes the Live Search Cash Back program will align the interests of consumers and the search engine, putting Microsoft “on the same side as the consumer.”

The job of Live Search will be to match the most relevant products with the most relevant consumers.

Microsoft will likely offer advertisers a CPA (Cost-Per-Acquisition) model rather than a traditional search engine Cost-Per-Click (CPC) auction. (Search Engine Watch)

Time will tell if the same old Microsoft brute force strategy will work against Google. The fact that Google’s established business model is the one Microsoft is attempting to adopt, without the accompanying revenue stream makes it an uphill battle. The fact that Google search just plain works better than Live Search is another. If I were an MS shareholder, I would question why MS needs so badly to be in this business.