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Consider this as a rant, but with today’s announcement of Live Search Cashback program Microsoft has stooped itself to new lows. I cannot believe  that Microsoft is actually trying to be the number one search engine ahead of Google, Yahoo by actually by paying the users in return for visiting their advertisers. Doesn’t sound like a good idea to me though.

More like the proverbial, “If you can’t get users to your site, buy them!!“.

If you are wondering how this scheme actually works, head over to the detailed explanation by Microsoft. Basically you search for deals using Live Search; when you find deals with a special coin shaped icon like above, it means you’ll receive a small amount of money after you’ve bought something. When your balance reaches $5, you can claim your cash.

I know you feel this is some kind of cool idea, but let me take some time and explain why this program simply doesn’t cut it, why it’s a chock-full of failure…

According to the FAQ, to be eligible for the program you have to be U.S. citizen or legal resident, and at least 18 years of age. Everyone else, forget about it. Moreover, Microsoft does not guarantee you’ll receive cashback bonuses if you use an alternative payment method when purchasing items, such as PayPal or Google Checkout. Seriously Microsoft are you kidding me?

I personally feel that Microsoft is running out of ideas on how to improve the effectiveness of its advertising system in comparison to Google Adwords that continues to grow steadily. By changing from a Cost Per Click model to Cost Per Acquisition model, Microsoft is giving out higher returns to the advertisers for sure, but it doesn’t show good faith in its advertising platform.

Another point is that the payouts are set to a pretty low amount and are pegged at 5$. I know what I’m going to say next might sound like crazy talk but try thinking this way. Why on earth would Microsoft keep the payouts so low, if they have faith their initiative and they think there is quite a bit of money to be made by shoppers. I know you could say that are trying to attract more users, but another way of attracting them would be stating something like earn atleast 1$ for every complete transaction.

I’m skeptical if this program will work or not, but I’m sure paying the users in pennies isn’t going to help much when they are purchasing products worth tens or hundreds of dollars.

Google has a superior product search engine and way ahead of Microsoft at the moment. I’m sure Microsoft will be able to attract buyers who enjoy saving a buck here and there but these are not the kind of people that are advertisers are looking for. Advertisers are looking for people who are high spenders not the kind who save pennies.

Throwing away goodies at both searchers and advertisers isn’t a good long term strategy if you ask me. This initiative of Microsoft is no way going to help it beat Google or Yahoo in the search game. Come on Microsoft show some real stuff, not all this throwaway goodies. It ain’t going to help much.

Do you feel that Live Search Cashback program is chock-full of failure, or it has the potential to be a big success?