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Saturday, May 24, 2008

Microsoft Offers Search Incentives

The search engine giant Google holds more than 60 per cent of the searches done on the Internet and thereby huge revenue through search contextual ads. The other major players in this field, Yahoo! and Microsoft have been trying extra hard to be seen in the scenario by boosting their technology. As a last attempt, MS even tried a merger with Yahoo! for 47 billion to compete with Google. But nothing worked out and the Google giant stood tall and still in its merit fortress.

So, now here is a grave new development from Microsoft, which, feeling that they may trip off the cliff if this goes on further. MS offers cash back to the users of their search engine (Live Search) to find products from the Internet. As a last strategy from MS, would this work out or not, we have to wait to see.

In a press conference held in Redmond, Washington, Bill Gates, MS chairman, conferred the glad news to the web searchers. The cash back payment would be made through the popular online money transfer subsidiary of eBay, PayPal. And the customers of course have the options to choose checks or drafts.

The most important announcement for the advertisers is that the new advertisements will be “Cost per Acquisition.” This means, the advertiser need pay Microsoft only if the searcher clicked and purchased from the site. Otherwise, they don’t have to pay. Google’s Pay-Per-Click monopoly would get a big hit from this?

Adwords, the largest advertisement network in the world by Google uses Pay-Per-Click technology, meaning the advertiser pays a certain pre-calculated amount (nearer to $1 for major search words and some cents for less competitive search words) per click. If the CPA scheme from MS becomes popular (and which the advertisers would love to see), then Google’s business may be in an awkward position.

It’s not a great news for ad publishers, however, if any system goes CPA, because the publishers will get paid only if an actual purchase happens. Currently, they have both options (the CPA option coming from companies like Amazon and ClickBank and CPC from Adsense, Adbrite, and many others). So, CPA getting popular will help only giants like Microsoft.

Google’s stronghold in the search engine world is completely based on merit. Their contextual ad strategy is such well developed that the advertisers have the opportunity to get maximum business from it, well optimized for the keywords they target. So, Google’s CPC ads are well in with the advertisers. In this scenario, how many of them would love to test MS technology is questionable. Also, cash back scheme would attract a hundred thousand more greedy searchers to MS Live search and thereby ten thousand more sales for advertisers. But how it will compete with Google is yet to be seen. Google’s superior technology makes 60 % more revenue from contextual ads than their next rival, Yahoo!.

After the failure of MS’s 47 billion bid on Yahoo! and the recent talk of cooperation of Yahoo! and Google opening partnership, MS, sitting idle, may just vanish from the table without even their knowledge. So, this strategies are their wriggles to fight drowning. Desperate, any giant would attempt anything!

Copyright © Lenin Nair 2008