Microsoft has traditionally been a small player in the online search and advertising game. After their recent failed bid to acquire Yahoo! to boost their competitive position against Google, Microsoft had to come up with something else.
And so they did. Last week at the Advertising Leadership Forum (Advance08 ) Bill Gates unveiled Live Search Cashback: the advertising scheme that will convert traditional web advertising from PPC/CPC (Pay?Cost Per Click) to PPA/CPA (Pay/Cost Per Action). The scheme will reward web surfers who click on search ads with a percentage of what the advertisers pay Microsoft.
While Microsoft may still not be able to catch the vast majority of regular search traffic, their new scheme is a direct strike at the online shopping market and will probably capture some serious market share if Google and Yahoo! don’t respond with similar schemes. With Microsoft’s CPA cashback, a web shopper who has the option to search for an item they wish to buy will be more likely to search for the item using Microsoft’s Live Search since the item’s price will be reduced by the amount the shopper will receive from clicking the item ad that will pop up on Microsoft’s search results page. The video below explains the new scheme.