Is Live Search Cashback a game changer?

Folks at Search Engine Watch seem to think so, but even Microsoft is still trying to figure out the business model behind the shopping search program.

I was listening in on a conference call this morning where the folks from Search Engine Watch lavished praise on Microsoft's Live Search Cashback program.

"I think it is potentially a game changer," said Search Engine Watch's Kevin Heisler, speaking on a call organized by investment bank Collins Stewart. "It's really I think a brilliant move by Microsoft, Bill Gates, and his team."

Later in the call, Heisler went a step further, suggesting that the program could even be bigger than the government's economic stimulus program, in which most taxpayers are receiving a $600 check.

"Microsoft has potential to make an even bigger impact on the economy if this takes off," he said.

Hmm. That seems like a very bold prediction, especially since there is still so much that is unclear about the program. First and foremost, how does Microsoft make money at this?

As I noted early on, Microsoft is giving back to consumers 100 percent of the money it gets from advertisers once a sale is made. So, for now, Microsoft's plan is to benefit indirectly from the program--ideally by grabbing searchers and advertisers that are currently going to rivals.

But after talking further with people involved in the program, Microsoft apparently doesn't see that as a permanent promise. The company may at some point change that, taking a cut from the rebate and thereby creating an entirely different business proposition for itself.

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