Business | Technology
Microsoft trades air miles for hits
Company eyes google traffic by letting live search users win redeemable 'tickets'.
- By Richard Waters, Financial Times
- Published: 23:41 October 3, 2008
San Francisco: Microsoft has unveiled the latest in a series of enticements to attract more internet users to its search engine, as it announced an air miles-style promotion in the US.
In spite of winning over some users in the short term, similar attempts in recent months have not been able to halt a longer-term slide that has seen the software company fall further behind rival Google.
Under the latest plan, known as Search Perks, Microsoft said that US internet users would be able to earn a "ticket" each time they conducted a search on its Live Search site, then redeem those for things such as music downloads (525 tickets) or T-shirts (1,100), or exchange them for regular air miles.
Under the pilot programme, to run until next April, users will have to download a piece of Microsoft software that counts the number of searches they conduct. Rewards are limited to 50 searches a day, and the programme is open initially to 250,000 people.
Early tests had showed the volume of searches from users rising three-fold, Microsoft said.
Scott Kessler, an analyst at Standard & Poor's, said that while promotions such as this can have a short-term impact, "the problem has always been whether they can be successful in changing people's habits and driving more sustainable market share".
This year, Microsoft launched a "cashback" plan that returns cash to users of its search service when they make purchases on certain retailers' sites. That followed last summer's Search Club, which uses games to attract users to do more searches.
Neither of these has had a lasting impact on search volumes. Microsoft's share of searches in the US climbed above 13 per cent last summer, but this August it had fallen back to 8.3 per cent, according to figures compiled by ComScore.
By contrast, Google's market share has climbed from 56.5 to 63 per cent in the same period.
Microsoft said the spike in searches last summer followed heavy promotion of the Search Club plan, which had since been reduced, and that the cashback arrangement was a long-term plan aimed more at boosting the profitability from search advertising for merchants rather than increasing the number of overall searches. Ebay, an early user of the plan, had seen the returns from its Microsoft search advertising rise by 50 per cent thanks to cashback, it added.
Steve Ballmer, chief executive, has said that Microsoft plans to test new business models in search as one of its weapons in trying to unseat Google.
Would such an approach encourge you to use a specfic search engine? What other incentives could be offered to change typical usage?
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