» Microsoft's "Cash Back" Google Search Killer: Great Idea, Won't Work - Silicon Alley Insider
Microsoft will not likely offer enough “cash back” on each purchase to make the service worth using for most users. The search business is wildly and fantastically profitable in aggregate, but it is composed of billions of small-value revenue events. 1 million $1 clicks generate $1 million of revenue for Google, but even if Microsoft gives 50% cash back on each click, that’s only 50 cents per user per transaction. If you’re buying a $5 item, 50 cents is a nice refund, but if you’re buying, say, a $25 item, it’s chump change. Folks who clip coupons in the real world will be very excited about Live Search Cash Back and will likely use it religiously. But there’s a reason coupons haven’t taken over the world.