Microsoft released a cashback search service this year and earlier today announced the initial results of the scheme, much to the surprise of many of the doubters that poo pooed the scheme when it was announced.

Microsoft is reporting that according to Comscore, Live Search referred 12% of all commercial transactions across the web.  There’s been a 30% increase in the number of products offered via Cashback. 4.5 million unique users per month are generating 68 million commercial queries. eBay has seen an increase of 50% on their ROI.

Does this result vindicate the approach and breathe fresh life into the cashback sector?

Whilst the results are impressive when compared to the 9% market share that the Microsoft search engine achieved over the same period I think time is needed to analyse whether this iniative will provide lasting value to Microsoft.

I’ve spoken to a few people about this and it does seem that many are searching for products on Google, then heading over to Live to get their cashback, with some even setting up scripts to automate this process for them.  Not sure that’s really the outcome Microsoft was hoping for.

They have however announced an expansion to the scheme partnering with shopping cart providers Miva Merchant, Early Impact Inc. (ProductCart) and 3DCart.  That will enable consumers who use these carts become eligible for cashback.

I’ve seen comparisons between Hulu and YouTube and it seems apt.  Hulu isn’t likely to be threatening YouTube’s market leadership but has carved out a nice niche for itself in the video sector, and it seems that Microsoft’s cashback service is doing a similar thing.