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Microsoft's Search Cashback Plan: Not Such a Bad Idea

Michael Arrington goes against the grain with this post that extols the (potential) virtues of Microsoft's e-commerce search cashback plan. Unlike many industry pundits, Arrington argues that combining a CPA ad model with user incentives is a solid strategy because: "It's a bold move that goes for Google's throat, and it will likely have a material impact on their search market share."

Arrington says that it's clear that a pure technology play (like Ask's 3D improvements, Yahoo's Panama rollout, and even Microsoft's adCenter upgrades) is not the way to go up against Google's search juggernaut. Nor is simply making CPA more widespread--since advertisers can already experiment with acquisition-based pricing on Google and other engines. "So instead, Microsoft is taking the CPA model, which lowers risk to advertisers, and combining it with a straightforward payback mechanism to users," he says.

And the combination is a one-two punch that "hits Google in its sweet spot - commerce search," Arrington says. "And it may have a bigger impact and a faster impact on Google than people realize."



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