Today’s closure of Microsoft’s two-year-old Cashback experiment serves as a reminder of an important point: it has failed to come up with any smart ideas to subvert Google’s business model.
Ballmer and Gates always made clear that they saw the search wars taking place on two fronts – technology and business model. Improving the quality of results and the user experience was only part of the fight. Turning the tables on Google through business innovation supposedly offered another opportunity.
Unlike many other commentators, we never saw a problem with Microsoft’s idea of handing over a portion of its search advertising revenue to the searchers who were helping to generate it. Calling it “bribery” and a mark of Microsoft’s desperation missed the point. Many businesses operate with loyalty bonuses like this.
The problem is, though, that it didn’t work – and Microsoft has not done anything else to try to disrupt Google’s amazing cash machine.
