Microsoft enjoyed a 15% gain in American search volume in the month following the launch of its Live Cashback search product, according to Comscore's June U.S search engine rankings report. This erases losses made by Microsoft the previous month, giving the company a 9.2% overall search market share.
While Microsoft claims it did not design Live Search Cashback to grab market share away from Google and Yahoo!, the company is hopeful that more users will come to them when searching for goods to buy online, with those queries tending to bring in the lion's share of advertising dollars. Indeed, having 9.2% of the search share doesn't mean Microsoft has 9.2% of the search marketing dollars. Many publishers go to Google to partner on ads, which means advertisers must go there to get inventory and an auction system pushes up prices. This results in, not only fewer queries for Microsoft, but also less revenue per query for the company. With estimates that the worldwide online advertising market will be worth $80 billion by 2010, it's clear to see why Microsoft are keen to get people using their Live Search Cashback product.
Microsoft's Live Search Cashback gives advertisers the option of offering users a direct rebate for purchases made after searching on Microsoft. This is done through the product's shift of search advertising from cost per click (CPC) to cost per action (CPA), giving users the chance to claim back some of the revenue. While the latest figures from Comscore cannot be considered a definitive statement on Live Search Cashback's success as an ongoing product, last month's gain in search share for Microsoft is an early sign that consumers may be intrigued.
This is good news for Microsoft. The future doesn't look especially bright for desktop software sales and with Microsoft's core revenue largely derived from Windows and Office, Microsoft must increase their search market share in order to create sufficient revenue in the future. Neil Macdonald and Michael Silver, analysts for leading information technology research and advisory company, Gartner, warned that Windows was "collapsing" while speaking at a conference in April. With the advent of online applications such as Google Docs, which competes with Office, many feel that Windows is slowly becoming irrelevant. Needless to say, many will be interested to read Comscore's July report, to see if Microsoft's recapture of some of the market share was merely a fluke or a slow, growing trend.
