Just one year ago, June 1, 2009, Microsoft changed the name of its also-ran search engine from Live to Bing. On Friday June 6, 2010, I, like many others, received an email notice announcing that Microsoft has canceled Bing’s “Cashback” promotion effective July 30.
The troubled cashback program began in May 2008, during the MSN Live days, when Microsoft was hoping that cashback incentives would help lure more people to its search engine. The Cashback program was a way for advertisers to bid for search advertisements by offering online shoppers rebates whenever they found items through the Bing search engine.
Bing remains a distant third (same as in 2008) in the search engine race and according to Microsoft, Cashback didn’t move the needle enough to be worth the cost. “After a couple of years of trying, we did not see the broad adoption that we had hoped for,” Yusuf Mehdi, a senior vice president at Microsoft, said in the blog. “We are taking all the learning from the effort and putting it into some new programs.”
Cashback was launched on the basic premise that monetary rewards is the primary driver of activity and could give Mirosoft an edge over rival Google — but it turned out that, in everyday practice, it just wasn’t the case.
Did you know that the last time Microsoft’s online division actually made money was 2005? And even then it wasn’t much. And the situation has gone from bad to worse. In late April Microsoft revealed that its Online Services Division lost $711 million in the first three months of this year alone. That’s a $2.8 billion loss annual run rate! And according to this, since 1998, Microsoft’s online division has lost over $8 billion. Yikes!
Microsoft has never gotten much traction in the online game. It’s still a behemoth in the tech/software world, but not nearly as powerful as it once was (Apple recently surpassed it in market cap) and it is losing marketshare. According to some estimates, its share by 2011 will dwindle to nearly half of what it was in 2000. Interesting stats from Silicon Alley Insider on Microsoft’s crumbling empire.
The game today has changed for everyone…and will continue to change at an increasing rapid pace. No one can move forward by resting on past successes, that’s like trying to drive by looking in the rear view mirror. It doesn’t matter how powerful you were or are, tomorrow you could find yourself an also ran if you’re not willing to take an objective look at yourself and then take the risks to completely reinvent yourself in a way that is relevant to your customers.
