• TechCrunch/Cnet News.com, Monday, July 21, 2008 11:45 AM

Microsoft launched Live Search CashBack in June, and after its first full month of operation, comScore shows a 15% gain in search volume for the search giant vs. the previous month. As TechCrunch's Michael Arrington points out, "this erases the previous month's losses, bringing Microsoft up to 9.2% overall search share."

Live Search Cashback lets advertisers offer users a direct rebate for purchases made through Microsoft's search engine. The product shifts the advertising model from cost-per-click to cost-per-action, giving a lot of the revenue earned from advertising back to users. As Arrington says, "Live Search Cashback isn't designed to grab a ton of market share away from Google and Yahoo, but Microsoft is hopeful that more users will come to them when doing searches around buying goods online." Those just happen to be the kind of queries that bring in the lion's share of search dollars. The move is designed to help Microsoft grow its search share against Google, but it doesn't help the software giant's bottom line, as most of the money from purchases goes right back to consumers.

Cnet's Ina Fried says that will it would appear that Microsoft is onto something with Live Search CashBack, the company will have to make real money-rather than give it away-to effectively compete with Google. "Pouring money into online ventures is only good if it produces returns," Fried says. "To date, Microsoft has not seen the kind of gains it will need to have to make it pay off...It's not enough to see the threat and try. To prove the grumblers wrong, Microsoft will have to do more than throw money online. It will have to win."

Read the whole story at TechCrunch/Cnet News.com »