Microsoft to woo online searchers with cash back

Microsoft has announced a programme to give customers cash back when they use Microsoft's Live Search as the starting point when making a purchase.

Chairman Bill Gates said on Wednesday at the company's advance08 advertising conference: "The one you'll see us particularly invest in in a major way is a deep focus on commerce. Commerce represents about a third of all searches but a dominant share of the revenue."

Gates said that, although the programme is just beginning, the company has signed up more than 700 merchants, representing about 10 million products.

Gates said: "The overwhelmingly positive feedback from all the partners confirms there is this opportunity for change."

The cash back Live Search programme is based on last year's Jellyfish.com acquisition. Although other sites have offered cash back to shoppers, Microsoft is building it into the search process itself, a process it is counting on to boost the popularity of such efforts beyond hard-core bargain hunters.

In video messages, the chief executives of Zappos.com and Overstock.com praised the move.

Overstock chief executive Patrick Byrne said in a video message, before appearing onstage with Gates: "It takes so much of the risk off the plate of the advertisers."

The move comes as Microsoft continues to trail Google and Yahoo! in overall search.

Gates reiterated that Microsoft is a long-term player in the search market and tried to put the best face he could on being a distant third in the business.

He said: "It's kind of fun to be an underdog. It's neat."

Original article: Gates: Microsoft to target e-commerce search from CNET News.com