Excellent post. Very persuasive arguments that no one else is writing or talking about in the mainstream. I think MSFT is so desperate for action on live.com, that I won't be surprised if they offer a matching program where they add to the cashback offered by advertisers, from their own pockets. Otherwise there is no value added, because there is nothing that stops the lowest bidder from offering the same deal on google. The additional advertising cost can be easily made up by the higher volume due to more eyeballs on google.
One thing you missed is that the cashback will be paid after 60-days, which reduces the value of that for most buyers looking for instant gratification. There is no justification for this delay, unless there is an intention to reject some of the legitimate cashbacks by the sellers, which would be a customer service and PR nightmare. Why can't they make it an instant rebate?
In the off-line world, sometimes manufacturers and stores offer significant mail-in-rebates because not 100% of those are claimed. Here they can't do this because there are no hoops to go through and presumably most folks will get the rebates. That's one less incentive for sellers to offer significant rebates.
History is not on MSFT's side on this one - A9 by amazon, iwon, ebates, even MSFT couple of years back, have all failed trying to do this.
I believe that GOOG will win the CPA wars with its better and more granular technology compared to MSFT's live cashback model. If I have to compare - GOOG's model is more like Priceline and MSFT 's offering is similar to hotwire/expedia/kayak. Ultimately a sustainable model like Priceline wins and has no credible competitors. A model like hotwire/orbitz/expedia/kayak which anyone can easily replicate is not very sustainable.
Excellent post. Very persuasive arguments that no one else is writing or talking about in the mainstream. I think MSFT is so desperate for action on live.com, that I won't be surprised if they offer a matching program where they add to the cashback offered by advertisers, from their own pockets. Otherwise there is no value added, because there is nothing that stops the lowest bidder from offering the same deal on google. The additional advertising cost can be easily made up by the higher volume due to more eyeballs on google.
One thing you missed is that the cashback will be paid after 60-days, which reduces the value of that for most buyers looking for instant gratification. There is no justification for this delay, unless there is an intention to reject some of the legitimate cashbacks by the sellers, which would be a customer service and PR nightmare. Why can't they make it an instant rebate?
In the off-line world, sometimes manufacturers and stores offer significant mail-in-rebates because not 100% of those are claimed. Here they can't do this because there are no hoops to go through and presumably most folks will get the rebates. That's one less incentive for sellers to offer significant rebates.
History is not on MSFT's side on this one - A9 by amazon, iwon, ebates, even MSFT couple of years back, have all failed trying to do this.
I believe that GOOG will win the CPA wars with its better and more granular technology compared to MSFT's live cashback model. If I have to compare - GOOG's model is more like Priceline and MSFT 's offering is similar to hotwire/expedia/kayak. Ultimately a sustainable model like Priceline wins and has no credible competitors. A model like hotwire/orbitz/expedia/kayak which anyone can easily replicate is not very sustainable.