Gates: Microsoft betting on e-commerce search

Software maker says it will continue to broadly compete in search, but says it is putting a "deep focus on commerce."

Bill Gates at Advance 08
Bill Gates makes lemonade at Advance 08 conference, saying, "It's kind of fun to be the underdog." Ina Fried/CNET

Update 11:30 a.m. PDT: Added more details about the cash back program and comments from CEO.

REDMOND, Wash.--Microsoft still wants to be all things to more people in search, but, in the short term the company would settle for just getting people when they want to buy stuff.

The company's big search news , as previously noted , is a program that gives customers cash back when they use Microsoft's Live Search as the starting point when making a purchase.

"The one you'll see us particularly invest in in a major way is a deep focus on commerce," Chairman Bill Gates said on Wednesday at the company's Advance 08 advertising conference. "Commerce represents about a third of all searches, but a dominant share of the revenue."

Gates said that, although the program is just beginning, the company has signed up more than 700 merchants representing about 10 million products.

"The overwhelmingly positive feedback from all the partners confirms there is this opportunity for change," Gates said.

The cash back Live Search program is based on the acquisition from last year. Although other sites have offered cash back to shoppers, Microsoft is building it into the search process itself, a process it is counting on to boost the popularity of such efforts beyond hard-core bargain hunters.

In video messages, the chief executives of and praised the move.

"It takes so much of the risk off the plate of the advertisers," Overstock CEO Patrick Byrne said in a video message, before appearing onstage with Gates. Byrne and a handful of partners were trotted out briefly, but did not speak before walking off again. "I hope they got the picture. If not, we will stage it again later," Gates said.

The move comes as Microsoft continues to badly trail Google and Yahoo in overall search. The company has used financial rewards in the past to gain users , although such efforts have also been short-lived gains that largely disappeared once the incentives went away.

Gates reiterated that Microsoft is a long-term player in the search market and tried to put the best face he could on being a distant third in the business.

"It's kind of fun to be an underdog," he said. "It's neat."

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