I have a lot of fun working with Angie on youlookfab.com, where she draws on about 18 years of experience as a designer, buyer, and fashion stylist to give people advice on what to wear and how to wear it. The site started out as a blog, but over time it has become much more interactive with a forum and other social features.
Our most recent addition to YLF is a store where we aggregate hand picked merchandise from many different brands and retailers. Angie evaluates items (often in the course of her work as a fashion stylist) and posts reviews. She is filtering the overwhelming selection of available items so that people who don’t have the inclination to search for ages can come to our site and see the cream of the crop.
We get revenue through the affiliate links. When someone sees something on our site, clicks through to the vendor and purchases the item, then we make a commission. It is a great model. Angie adds value by pre-screening the items and explaining them from a more objective standpoint, and we get paid through the affiliate commission.
Bing Cashback breaks our model.
People who exploit Cashback will find the thing they want through our site, but will then go to Bing and search for that item. They will use several search terms until they get a search results page that shows the item. They click through the link on Bing to purchase the item.
They get the Cashback discount. Bing gets some additional searches. We get nothing.
Now I’m happy that the customer gets a better price, but I’m annoyed that Bing is gaming the system. The customer didn’t “search” for the item using the Bing search engine. They already knew where to find it. They just faked the search to get the Cashback discount.
In fact, I know people who search for something on Google, and then fake the search on Bing to get cash back.
What is Microsoft hoping to achieve with these “pretend searches”? I wasn’t in the Bing team or exposed to their strategy so I can only guess that they hope to win people over from Google by exposing them to the Bing experience (which is pretty cool these days). Perhaps they also hope that the additional searches will boost their apparent search market share.
Fair enough. I’m glad that Bing is free to do this. But I’m also angry that our business model gets scorched in the process because I doubt that the Cashback model will really help Microsoft in the long term. They are paying people to search using Bing, and it is likely that this customer acquisition cost will undermine their economics.
A far better strategy would be to offer better search. Bing has really started to innovate on user experience lately, and their recent gains in market share prove this point. I don’t recall Cashback getting a similar effect when it was released. Here’s hoping that Microsoft continues down the path of adding value through better search as opposed to destroying value by killing its profitability.
Posted: February 6th, 2010 under Business As Usual.