What are some things that you think a company should do when it realizes it is having trouble competing with the “big dogs”? The first thing I would think of is redesign the product. After that, maybe try to compete in a different market. And if you still can’t compete? Give up.
None of these things seem to have been going through Microsoft’s mind as they are realizing that they are not able to keep up with Google’s search business. After coming away unsuccessful from the attempted Yahoo purchase, Microsoft is now saying that they are going to be paying people who use their search engine for online shopping. According to CNBC, people who use Live Search and “who sign up for an account and buy items found using Microsoft’s Live Search cashback site will receive a percentage of the purchase price deposited into their account. When the total reaches $5, the shoppers can redeem their “cold, hard cash” via eBay Inc.’s PayPal. Microsoft said the rebates are funded with a portion of the money it collects from advertisers.”
I am constantly amazed by the economics of the internet. Seeing companies consistently overvalued and not charging for their services is one thing, but this one takes the cake. Usually a business model involves people paying you so your company can be profitable, but I have never seen a model where the company pays the customer. This rebate money is coming straight out of their advertising profits. How absurd is that? It’s like paying someone to hang out with you.
It just proves one thing to me: Microsoft is becoming like a spoiled child who, when it doesn’t get its way, kicks and screams and does everything in its power to be successful. Of course, every business wants to be number one, but it is unreasonable to think that because they have absurd amounts of money they should be able to take over any market the enter. Sometimes they just need to learn when to give up.
What do you think about paying people to gain popularity? Let me know.