Why Microsoft Plans To "Bribe" People To Use Live Search Could Backfire

Microsoft's plans to reduce the gap between its Live search engine and Google using cashbacks, coupons and other prizes through a brand new scheme called Searchperks and is opened only to US citizens.

The software giant already had launched a Live search cashback feature back in May 2008 but users had to spend money in order to get a few dollars back from their original purchase.

But the plans to reward users for their fidelity could backfire badly if Microsoft is not careful; Google "rewards" its users with a proper, cleaned out, relevant search result page, something that Microsoft Live has yet to achieve.

Live search could possibly start attracting the wrong kind of crowd, the one who looks to get something for almost nothing without any interest in the search features itself, and which does not attract high CPC rates with advertisers.

Then, there's the fact that it costs money to process the prizes, everything from postage and packaging to acquiring the prizes themselves.

Based on the approximate cost of each offer (Air miles, t-shirt etc) , one estimate of the cost of each search is approximately 0.5 cent which means that Microsoft is almost certainly not making much money per se, meaning that Live search is Microsoft's honeypot.

The firm also said that it would limit the number of people signing in for Searchperks to one million, which means that Microsoft could potentially have allocated a budget of USD 12.5 million for the whole campaign.

And In what looks like another desperate marketing attempt, Microsoft has launched luckysearch in Netherlands where lucky searchers can win prizes ranging from LCD screens or laptops.