In a slight break from news about
Microsoft Corporation (NASDAQ: MSFT) and Yahoo! Inc. (NASDAQ: YHOO) possibly merging, Microsoft has announced it is going to try, at least for now, an angle to get at Google Inc.'s (NASDAQ: GOOG) search dominance other than simply trying to buy a company that can't compete with Google on its own (meaning Yahoo).
According to WSJ, Microsoft is preparing to launch “Live Search cash back” - a service where consumers would literally get cash for using Live.com's internet search. Though the information was leaked through an unnamed source with little detail, presumably the plan is to leverage Microsoft's pile o' cash to effectively bribe search users into choosing its (arguably but probably... or definitely if one believes the markets have spoken) inferior search engine... sign me up!
The mechanics of the offer would involve search users getting cash-back on purchases of items found via Live.com, a modified version of customers getting cash-back on credit card purchases. Some analysts seem happy with the idea only because it is a fresh angle to challenge Google's dominance – and anything seems better than nothing... or does it?
This may be a fresh angle on drawing search users, but hasn't this been Microsoft's strategy in various markets for years? Netscape is the dominant browser – release Internet Explorer for free because we have tons of operating system and office suite cash, who cares about making money! PlayStation is the dominant video game console - dump huge sums into Xbox development and sell the unit at a loss to muscle our way into the market, we have billions in cash! Search the internet... what a novel idea, let's start MSN.com and Live.com late in the game (and base them on inferior technology) and bleed money forever until we can compete (Microsoft's search divisions lost money last quarter, just imagine how much money it can lose now! Yeah!).
Throwing money at problems is a perfectly good strategy, so long as it is a long-term strategy and not a desperate move for attention and a few new users at uneconomical prices.