In May of this year Microsoft announced the launch of their Live Search Cashback incentive. The following article will examine this incentives main principles and whether this incentive has drawn more traffic to the site and if this is affecting Google’s stronghold on the search engine market.

The Microsoft search engine introduced this fresh incentive to customers using search engines for finding out about and purchasing different products and services over the web. Live Search Cashback provides discounts when consumers buy products via searching on Live Search, to date some of the biggest online retailers have (including Siers) have joined offering differing ranges of discount depending on the product. The Seattle based giant has claimed that over a third of web-based searches are made with the idea of purchasing products and they hope this incentive will improve their relative poor performance in the search engine market, which they hold a 8% share, compared to Google who hold over 60%.

Microsoft’s reorientation of their search engine to specifically focus on commercial searches indicates that they have waved the white flag on trying to overtake Google in terms of algorithms and paid link strategies. It also signals that Microsoft’s management have stamped their authority on the search engine developers, which is an increasing problem in for SEO specialists as the market becomes increasingly competitive. The average discount rate on Cashback averages between 2-4% and is roughly the amount that Microsoft profit from cost per click adverts. The incentive also conveys a major shift in search engine optimization strategy, from Cost Per Click to Cost Per Action, which is considered by some as the optimal method of direct response advertising as it is highly measurable and that is a major challenge that faces marketing departments.

This dramatic change in search engine strategy derives partially from Microsoft’s low market share compared to its biggest rival Google and that Microsoft effectively has nothing to lose from trying this radical new strategy that could pay off massively.

the rivalry between Google and Microsoft has intensified slowly over the past half a decade, with Google forging strong alliances with many of Microsoft’s core competitors, most notably Mozilla with the recently released Firefox 3 web browser designed around facilitating Google. More disconcerting for Microsoft, Google have recorded a massive amount of success with their Google Docs application. They have developed a free word processor, powerpoint esq presentation and spreadsheet function, which is causing many to defect from the Microsoft Office software. Therefore it is not out of hand to to speculate that Google could soon be overtaking Microsoft’s $50Billion a year turnover and the associated branding powers that go with it.

When analyzing figures published by Alexa, Live.Search.com has had a slight decline in traffic since the cashback incentive was launched whereas Google remains steadfast in second place in the world (only due to the regional variations otherwise it would be top by a margin). This indicates that Google are still by way a major force in the search engine market and that the Live search Cashback incentive has not yet paid its dividends. This is largely down to Google having such massive brand equity and being the staple for the market with its chief technician Matt Cutts being the informal voice of the search engine industry. Also many searchers do not favour sponsored links in preference to websites that have been heavily worked on by Search engine optimisation specialists to the extent that they reach the top of the rankings, which many consumers directly associate with quality. Also Google tool bar comes pre-installed on Dell computers (2^nd biggest computer manufactures in the world) and are seen as the bench mark to be judge upon by many Search engine optimization marketing companies.

To conclude Google’s strangle hold on the search engine market is so strong that they are dominating huge players in the industry like Microsoft and even threaten to over take them in their core business practices in the near future. It is as direct result of this very threat that Microsoft have launched this Cashback incentive and heralds a major change in the sense that companies are no longer trying to compete with Google on a technological basis but are developing more creative strategies to compete with Google and it remains to be seen whether this will pay off in the long-term.

This entry was posted on Wednesday, July 16th, 2008 at 4:36 pm and is filed under Search Engine Optimisation Hampshire. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.