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Microsoft pulls plug on search bribery machine

So long and thanks for all the farce

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Microsoft is pulling the plug on its search bribery machine. The Bing Cashback program — which actually paid people to use Microsoft's third-rate search engine — will vanish on July 30.

In May 2008, as part of its desperate bid to catch the uncatchable Google, Microsoft began bribing people to use Live Search, Bing's precursor. If you used Live Search ads to find and buy certain items, Redmond would refund between 10 and 35 per cent of the purchase price. Then, when Microsoft overhauled its search platform a year later, the program morphed into Bing Cashback, operating in much the same way.

Payments to users came straight from Microsoft's product-selling advertisers. If, say, eBay posted an ad, the ad fee provided the cashback refund. In other words, the money went to the netizen rather than Redmond.

When Cashback launched at an ad confab in Seattle, Bill Gates pitched it as something that would reinvent the search advertising business. "2008 is the year that search got competitive," Gates said. "The overwhelmingly positive feedback from all the partners confirms there is this opportunity for change."

Two months later, Steve Ballmer insisted the program would show Google a thing or two about search advertising. "Since we are trying to change the business model — in fact we'll talk about things like Live Cashback, the way we're trying to involve the consumer and give them an economic interest in what they do on the Web, to give them better values when they go to buy things," he said. "Certainly as a percentage of revenue, we are on a strategy that will essentially drive higher attach rates for our own search site than Google would see."

Earlier this year, Ballmer admitted that the program wasn't as successful as the company had hoped. But he insisted it would continue. "I would say that it has worked, but it hasn't worked fantastically — in the sense that it has not completely changed the economic structure of the business, for the user or anyone else," he said.

"I expect we will continue Cashback, continue to rethink it, to try to do things around basic Cashback concepts to make it a more important thing for the merchant as well as the user."

But now, it will try no more. In a post to the Bing community blog, Redmond announced that the program will die on July 30. "Why are we doing this? When we originally began to offer the cashback feature, it was designed to help advertisers reach you with compelling offers, and to provide a new type of shopping experience that would change user behavior and attract a bunch of new users to Bing," the post reads.

"In lots of ways, this was a great feature — we had over a thousand merchant partners delivering great offers to customers and seeing great ROI on their campaigns, and we were taking some of the advertising revenue and giving it back to customers. But after a couple of years of trying, we did not see the broad adoption that we had hoped for."

In a lot of ways, it was also a good laugh. Just after the launch of the program, in an attempt to game it, one clever eBayer put a $714 price tag on $630 in cash:

eBay Live Search game

Pay cash for cash

Yes, $630 in cash could be yours for $714. But if you accessed the page through a Microsoft Cashback ad that returned 35 per cent of the purchase price, you could make up the difference. You could profit, and so could the seller.

It's unclear whether this actually worked. But at the time, Microsoft told us it had made an effort to crack down on the practice. "With any program of this type that has a lot of early buzz and provides significant value to consumers, there comes the risk of inappropriate uses or even fraudulent activities," the company said. "eBay and Microsoft have therefore incorporated various levels of abuse and fraud mitigation techniques throughout the program.”

Several weeks later, Microsoft actually sued some John Does for bilking its bribery machine.

Then, at the height of the 2008 Christmas buying season, the search bribery machine broke down. The day after Thanksgiving — ostensibly the biggest shopping day on the US calendar — Redmond showed even less shame than usual, offering a 40 per cent refund on all HP goods. But the machine cracked under the weight of too many shoppers.

Thanks in part to Bing Cashback, the Microsoft search engine is still very much in the red. But Ballmer insists that one day, it will turn black. ®

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