Microsoft's Cashback Ad Plan Is (Maybe) Working

(MoneyWatch)  I've written about Microsoft's plan to actually pay consumers to use Live Search in past (and offer advertisers the chance to only pay per action, instead of click) before. First I said it looked utterly hopeless, and then only probably hopeless.

Now it looks like it may be time to revise that answer again -- there could actually be some small sliver of hope for Live Search. Via Silicon Alley Insider, Nielsen Online has released their May and June numbers, and the data shows Microsoft with a bump of 39 percent in search engine traffic since April. From the post at SAI:

Specifically, Nielsen says Microsoft garnered 1.11 trillion search queries in June, up 6.2% from May -- Cashback was launched on May 21 -- and up 39.3% from April, the last full month before Cashback launched.

Company	June '08 MM	y/y	m/m	vs. Apr.	May '08 MM	y/y	m/m
Google	4,650,982	19%	0%	-9%	4,654,624	15.4%	-8.9%
Yahoo	1,310,273	-12.4%	-1.4%	-9.4%	1,328,667	-13.8%	-8.1%
Microsoft	1,108,976	12.5%	6.2%	39.3%	1,043,848	72.4%	31.1%

The article goes on to note that ComScore, the other big name in online metrics, flatly refutes these numbers, showing only a 9.9 percent jump in overall searches for Microsoft between April and June, with the numbers actually falling in between April and May. Also, Internet Explorer automatically funnels mistyped URLs into its own search engine, which may or may not be affecting over all traffic stats.

With the conflicting data, it's difficult to tell whether the cashback program is working to help draw users (and therefore advertisers) into using Live Search. It's easy to laugh at the cashback promotion as chintzy and desperate, but coupons, discounts, and sales are at the heart of the retail market. Especially as high gas prices see consumers staying in and shopping online, it's possible that Miscrosoft has tapped into a way to finally start gaining market share against Google, and perhaps even to surpass waning Yahoo.