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Microsoft launches yet another rewards program

Microsoft just announced from their blog the launch of a new loyalty program, Bing Rewards. It is nothing like Bing Cashback which the company shut down back in June and reminds me more of SearchPerks, the very first rewards program from Microsoft.

To participate you must install Bing toolbar and have a Windows Live ID. You get 250 credits at sign up and then one credit for every five Bing searches, and up to eight credits per day (according to Search Engine Land). You can exchange the credits for swag and other goodies. E.g $5 Amazon gift card is 541 credits (roughly 2 months of using Bing every day) and one Fandago movie ticket is 1506 credits (or 6 months of Bing punishment).
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Microsoft to shut down Bing Cashback

Microsoft has just announced on their blog that they will be closing their popular rewards program, Bing Cashback. It is a dark day for all the bargain hunters in the US and a celebration for all the smaller rival businesses.

The explanation given is that the revenue Microsoft was pouring back at the shoppers didn’t result into new search traffic acquisition, and keeping the program as a business of itself (which it once was) apparently hasn’t been in Microsoft’s plans.

Is it another evidence that “money cannot buy happiness” as Techcrunch puts it, or am I just being sarcastic here? Which ever way it is, my strongest sentiment is a feeling of sadness about all the great technology wasted by the company in an attempt to salvage a fairly unrelated business.

Bing Cashback can cost you money

Imagine you are an owner of a small antique shop on Main street of a tourist town called ‘Bing’. You are doing your business just fine, the sales are not great but enough to make ends meet. Now imagine the township announces new initiative targeted to bring more visitors to the town, they call it ‘Cashback’. Should you accept, you will get your front door remodeled for free and the village will advertise your business. However there is a catch - you are required to pay back each customer who buys something at your store a percentage of the sale. The idea is that as customers see the cash flowing back to their wallets they will tell about ‘Bing Cashback’ to their friends who will want to take a tour of the town as well. ‘Bing’ of course has more than antique shops on Main street, but this is besides the point.

Now imagine that your shop has a backdoor which wasn’t remodeled, and by the way, this was the door that all your regulars have used all the time before you got on ‘Bing Cashback’, and they still do.

Two things can happen in this imaginary world:

  • If you keep your prices low (at the level before you joined ‘Bing Cashback’) you will hurt your bottom line
  • If you raise your prices to compensate for the lost revenue, you will hurt your regulars, who still use the backdoor and don’t get cash back

It sure feels like your business is doomed either way, that is unless you have a magician friend, ‘Marketer’, who comes up with a ‘genius’ solution. He invents special glasses that when used will make the price on all your merchandise look higher, and he then suggests to give out the glasses to everyone who comes in the store through the ‘Bing’ remodeled frontdoor. You take on the advice, your business is booming until one day an ‘unforeseeable disaster’ happens - one of your customers takes off the glasses and sees the lower prices!

This is what in essence happened today with a New Jersey based electronics seller Butterfly Photo when Meghani, a blogger at search engine startup Bountii, exposed their ‘magic glasses’ practices to the world.

Butterfly Photo set a three month cookie on my computer to indicate that I came from Bing. Any product I look at for the next three months may show a different price than Id get by going there directly.

Meghani claims he knows ‘more than a few instances’ of this kind of ‘magic marketing’, but he unfortunately doesn’t name the specific stores.

On one hand, the online world has opened new unimaginable before marketing opportunities as well as new ‘creative’ ways for businesses to scam their customers. On the other hand, thanks to social media, ‘business failures’ like this have become more costly for business owners which to some extend counter balances the situation. Overall I feel excited to live at the time I do and be a part of this ‘online revolution’.

What is your experience with Bing? Have you ever been a target of the dual price ‘magic marketing’? Do you think Bing Cashback will bring Microsoft success in a similar way the banks have benefited by hooking their customers to the cash back rewards credit cards?

Microsoft closes Jellyfish Smack Shopping

Jellyfish is a price comparission site that launched with an twist. [Almost] every product you bought via the Jellyfish links had cashback and they paid at least 50% of whatever Jellyfish itself was making (as the team claimed).

The idea was great but it wasn’t until late 2006 when the team really hit the jackpot with their daily reverse price auctions called Smack Shopping. The auctions attracted a lot of attention in the media and brought new audience to the site. It was a smart idea and a very creative way to promote the main business.

In October 2007 the startup was bought by Microsoft and the corporation used it to spice up their Live.com offering with Cash Back to better compete with Google Product Search. For about a year Smack Shopping was all that’s left of Jellyfish at the original domain. The auctions will cease to exist on February 16, 2009 according to the email Microsoft sent out to the members today.

Dear SmackShopping User,

Thank you for using SmackShopping and participating in the SmackShopping community over the past few years. Regrettably, we are closing down the site effective February 16, 2009. SmackShows, chats and other interactive SmackShopping services will be discontinued at this point. However, you will be able to redeem any coins you have accrued for 90 days (until May 15, 2009). At the end of 90 days the site will be brought down completely.

Please do not reply to this email, but if you have any questions, please contact us at questions@smackshopping.com.

Sincerely,
SmackShopping Team

Why are they doing it?

My guess is that it made little sense to keep the auctions without the money making part of the business attached to it. I think they are great at stirring the news and promoting other products but they are a terrible money maker by itself. Why do you think they chose to close the show? Please share your own opinion in the comments.

Also read: Smack Shopping Lands Bellyup In The Deadpool at TechCrunch

Microsoft launches Search Perks

Microsoft moves further down the road of buying its way into the search dominance (check out Live Search Cashback they launched back in May) with October 1 launch of a new loyalty points program - Search Perks.

The idea is very simple: search the web with Live Search and get a point for each search (up to 25 a day) which you can exchange for prizes come April 15, 2009. You currently get 500 points just for signing up - enough for a few music downloads or a deck of play cards.

There are a few more things you need to know:

  • The program is open to US residents only.
  • You will need to install a small internet browser add-on.
  • You can’t use it on any other browser but IE.

Encouraged by the free stuff, I initially considered giving Live Search a try, but the browser restriction killed it for me right there. IE is simply no match to Firefox and shuffling two browsers for different tasks is just too much.




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