Comment on Msft’s "cash back" problem program
Microsoft’s "Cash Back" Google Search Killer: Great Idea, Won’t Work
First, we think this is a smart idea. It’s a natural market response to a sector in which one player has suddenly absconded with absolutely fantastic profits (and profit margins), leaving all other competitors flopping in the dust. We think Kevin Johnson was right to describe it as "disruptive," and we’re sorry we needled him for that. (Of course, we would have inserted the word "potentially"–see below.)
Second, Microsoft appears to have executed the plan intelligently: 18 high-profit verticals in which searchers get cash back if they buy something from participating merchants.
This announcement will likely create uncertainty in the industry, and we expect Google investors will worry about it for a while (needlessly, in our opinion). At first blush, the plan also sounds as though it will turn the industry on its head, forcing Google to implement a similar plan or go bust. So why won’t it?
