Here’s Some Cash?

Rebates are an old tactic in the old game “use my service or buy my product now, and I’ll give you money back later.” So after Microsoft announced Microsoft Live Search Cashback and I’ve had some time to ponder it, I can sum up my opinion as this is a very interesting play in the area of ecommerce search. But I do not view this as a big strategic salvo in the search wars. Some do, and with some very compelling arguments.

Here are some of my thoughts of Microsoft Live Cash Back:

• I do not view this as “big” news out of Redmond nor do I feel it is a huge strike into the hull of the Google search tanker?  Verdict:  No material effects on Google’s search bottom-line.
• I always get very concerned when “cash back” or “lower prices” is the angle.  Sometimes it makes total sense when it is the underpinnings of the business model (which it could be here).  But because this is Microsoft and they tried so many different tactics against Google, the combination of attempts conveys to me a “this is our last shot” attempt at doing something sort of feeling.
• I feel only the truly price-sensitive will use this as one of their many tools when looking for the lowest price on a product they know they are actively shopping for.  Is this a large market? Perhaps. Could this become a leader in commerce showing?  Absolutely.  But that should be a concern for the Shopping.com’s of the world and Google Checkout.
• On the point above, why is everyone looking at this against Google overall.  Perhaps Microsoft simply has decided that grabbing share in the general search arena is a losing proposition and that commerce search is still really the unclaimed frontier?
• People search for products all the time.  However, often they are doing research on the best product for them.  So while a large percentage of Google searches are commerce related they ARE NOT NECESSARILY commerce related with the “intent-to-purchase”.  And that is the only thing Microsoft’s offering real tries to solve for.
• People care about experience and ease-of-use.  That is why everyone fell in love with Google in the first place, because it works.  So, premise is only 10% of the battle.  Any new search-related product better beat Google (and beat it hands-down) in experience, ease-of-use and results.  Otherwise, people are going to switch and the low switching costs of the web are not going to help.  By early look didn’t impress and it didn’t impress others either.

In my mind, I am looking beyond the points above and asking a more philosophical question:  Why does Microsoft have to play in search at all? To me, that is the fundamental strategic issue and probably another post which I’ll follow-up on.  The rest of this is just details if that question was answered incorrectly in the first place.