With or without Yahoo or even critical pieces of the Sunnyvale-based Internet giant, Microsoft is determined to go after Google with all it's got. And excluding an evolution through acquisitions or mergers, the Redmond company can only generate growth on the search engine and online advertising markets organically. In this context, Microsoft has been unwrapping the spring 2008 update to Live Search, a release which culminated at the advance08, the company's online advertising leadership forum, with the outlining of a new search business model.
Microsoft Chairman Bill Gates noted during his keynote opening the conference that the Redmond company's overall strategy is to offer the best search results possible. In this regard, he emphasized that Microsoft is aiming to deliver innovation to the business model of search, while at the same time ensuring that it will advance the task of searching to the next level.
"A particular focus for us where we see a lot of opportunity is in one of those types of search. We're going to do a great job, we're going to be the best across all those things and invest in all of them. But the one that you'll see us particularly invest in a major way is a deep focus on commerce. It's kind of interesting. Commerce represents
about a third of all searchers, but a dominant share of the revenue that comes out of it," Gates stated.
According to Microsoft's co-founder, users are not indicating a strong level of satisfaction with commerce related searches, and certainly one that fails to be on par with references and entertainment searches. Commerce seems to be the sweet spot Microsoft has picked as offering the strongest possibilities for growth in a market otherwise dominated to saturation by Google.
And, in this regard, the Redmond giant's tactic is not complicated at all: "simplifying the task and awarding both the consumers and advertisers for their engagement in a deeper way, we think this is -- you know, there's incredible possibilities here." And the new Live Search Cashback service that launched on May 20 is designed not only to bridge the gap between consumers and advertisers/vendors, but also to provide financial rewards to both.
"We believe search can offer much more value to consumers and advertisers than it does today, and we see Live Search cashback as an important opportunity to deliver additional value," Gates commented. "Our goal is to make Live Search the most rewarding commercial search destination on the Web. Live Search cashback will help advertisers drive more online sales while giving consumers a new way to stretch their dollars."
Essentially, via Live Search Cashback, Microsoft will pay consumers a percentage of the price for the products they acquire online after finding them through Live Search, introducing a new Cost-Per-Acquisition model. But while looking to make a strong impact on a quarter of the search market, Microsoft also aims to attract additional audience to Live Search, and increase its market share by effectively buying users away from competitors. Gates has made it clear that he regards Live Search Payback as a potential turning point that would bring Google's undisputed domination to an end.
"I think years from now you may look back and say, wow, you know, search started to get a fair bit more competitive and we can look back to that announcement. There's a lot of elements every six months doing dramatic things, very long road that our long-term approach equips us for. But this is a pretty interesting thing, and I think is a great illustration of all the points I've been making about our strategy and how search can be made better for you[sic]," he commented.
But in the end, Live Search Cashback and its financial incentives are only a piece of Microsoft's search strategy puzzle which also involves organic evolution through advanced relevancy and selection, expanding search not only to devices beyond the desktop, but also in terms of its role in common user tasks from commerce to navigation, delivering enhanced tools, software and superior infrastructure. Gates still appeared determined to bet on innovation, both in the economic model of search as well as in the advertisers and consumers engagement model.
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