Microsoft Live Search has launched an initiative called Cashback which offers a discount for products purchsed on MSN search. This incentive is similar to an affiliate program where the publisher (MSN) receives a cash bounty for purchases made from participating advertisers. Microsoft only gets paid if a user buys a product, compared to normal Pay Per Click advertising (which provides 98% of Google’s revenue) which generates revenue for every ad click.
The interesting part of the Live Cashback promotion is that Microsoft gives 100% of the discount back to the consumer. So if you purchase a digital camera on MSN Cashback
Microsoft needs to do something drastic to get back into the search advertising game. They’re third in U.S. search market share with under 9.1% of the online search market. Six months ago Microsoft Live Search had 9.8% market share. Google, by contrast, has 61.6% and is growing steadily:
Statistics from eMarketer shows over 50% of web users in the US begin online shopping using a search engine. 14% of online shoppers begin a product hunt using a comparison shopping search engine. 15% of shoppers navigate directly to their e-commerce site of choice (amazon.com, buy.com, ebay.com etc.)