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Ted Leonsis on AOL, Microsoft, the NHL   An Internet Parking Market: Brilliant!
May 23 2008 7:56AM EDT

Good Luck with the Bribing, Microsoft

The joke back in the dot-com era was that you could set up a Web site that did nothing but sell dollars for 90 cents, lose money on every transaction but still get a huge valuation because you'd get so many eyeballs. I guess Microsoft didn't realize it was a joke.

The company, to try to win some search market share back from Google, has created Live Search Cashback -- a program that offers rebates to people who use Microsoft's search to buy certain products. From the looks of things, we're generally talking about discounts of maybe 5% -- the kind of discount you'd get from, say, Old Navy by having an Old Navy card. Some analysts think it will work and win Microsoft a chunk of traffic. Lots of others think the strategy is bound to fail.

Personally, I don't see it. People are flocking to sites that give them huge discounts on expensive items, like designer clothes. But shaving a few dollars by going to a different search site? On the Web, that's like driving across town to Shoppers Food Warehouse to save $10 on your family's grocery bill. Most people won't bother.

Microsoft has $24 billion in cash. There are about 200 million U.S. Web users. Maybe the company can just offer everyone $100 to switch search engines. Think that would work?

 

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