As promised, I’ve posted some thoughts on Microsoft’s Cashback program over at Thomson’s Future of Search site. From the post:
….In essence, Microsoft has taken the affiliate model – where merchants pay channel partners for leads which turn into sales – and turned all of us into potential partners. If it sounds like a crass play to buy your search allegiance, well, it is. But Goto.com was crass too, and it turned into a multi-billion dollar market, the ultimate expression of which is Google. So before you judge it, it’s worth thinking about a bit more deeply.
There’s no doubt that with Cashback, Microsoft is attempting to disrupt the search marketplace. But there are only a few axes around which you can do that. One, you can disrupt the presentation of search. This is very hard to do, but it’s happened before, and will happen again. Secondly, you disrupt the business model of search. And third, you can disrupt how search is created (ie, the secret sauce of relevance). There are startups along every one of these axes of disruption. But with last week’s news, Microsoft is focusing on the second one (business model). Unless, that is, you read between the lines. That’s when we see the beginnings of disruption along lines one and three as well. ….
…. Lost somewhat in the analysis so far, I think Farecast is a key part of Microsoft’s strategy – it’s a disruption along the first axis of search – how search is presented. Those of you who have read Searchblog for a while may recall my initial post on that site: Rip Me Off No More. It really struck a nerve, I had more comments on that post than nearly any other in the history of my site. Turns out, people really like a search engine that promises to 1. help them find the best price and 2. does it in a trustworthy, intelligent, and timely fashion. …..
… Is disrupting the business model by paying search customers when they buy something a good idea? I think it is. But it’s not going to work unless we trust the search results in the first place. That’s where Farecast comes in. In the short term, Cashback will probably goose Mircosoft’s user loyalty numbers, which should also boost its share of searches overall. But longer term, the key to winning will be the integration of Farecast-like innovations into Microsoft’s offerings. I’d look for these to come in the next year, if not sooner.
Let me know your thoughts…