Microsoft says rebate program draws new searchers

Under Microsoft's Cashback program, launched in May, the company rewards shoppers with rebates from a few cents to $20 or more on items they find using its search engine, Live Search.

When Microsoft began Cashback, the company said it would measure its success by the number of items advertised in the system, growth in its share of searches that lead to transactions online, and how happy merchants are with returns on their investment in Cashback ads.

In an interview, Frederick Savoye, a senior director of product management for Live Search, said the number of items advertised on Cashback has grown to 13 million, from 10 million at launch. Companies like eBay Inc. and Hewlett-Packard Co. say the ads they place on the Cashback site perform better than other paid search advertisements online.

A study conducted at Microsoft's request by research group comScore Inc. found that the software maker snagged 12.9 percent of product searches in the second quarter of the year. That's better than Microsoft's overall share of U.S. search queries, which was around 9 percent in that quarter, according to comScore, and that could mean Microsoft has found a viable way to draw new searchers.

However, overall search leader Google Inc. and No. 2 Yahoo Inc. both still outpace Microsoft in commercial queries, nabbing 58.2 percent and 24.3 percent, respectively.

Savoye said that 4.5 million people have been using Cashback every month since it started, and that the program has been effective in boosting Microsoft's overall search share.

Data from comScore, however, show Microsoft's search share rose less than a point to 9.2 percent in June, the month after Cashback launched. In July, Live Search's share dropped to 8.9 percent.

"We still have work to do, but we're very, very focused here," Savoye said.

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