Microsoft will pay for play

Consumers given 'Cashback' to use search engine

REDMOND, Wash. -- Microsoft is taking its fervent quest to catch search advertising champ Google to another level. The software company has introduced a program that will essentially pay people to use its search engine.

During a keynote address Wednesday at Microsoft's advance08 conference, outgoing chairman Bill Gates unveiled Live Search Cashback, a new product designed specifically for e-commerce advertisers. The company hopes the offering will fundamentally alter the search-advertising business model.

Cashback allows searchers to sift through 10 million product offers from more than 700 partner merchants, comparing prices and weighing how much cash credit they are eligible to receive on purchases.

Instead of bidding on search ads on a cost-per-click basis, advertisers can use Cashback to pay for ads only when users make a purchase -- a cost-per-acquisition arrangement. (Cost per click is the norm.) With Cashback, Microsoft agrees to pay a portion of these advertisers' fees to consumers who establish a Cashback account.

"We're going to take a portion of the money we collect from advertisers and redirect that," Gates said. That approach "will introduce, we believe, some new dynamics in the marketplace."