Did Microsoft Stop Bing Cashback to Curtail Online Division Losses?
The blogosphere is all buzzed today with the news of Bing stopping its cashback program where they gave cash back to users who purchased products using Bing search. Microsoft has said that they are stopping the program because of low use, however, there might be more things than what meets the eye.
Let me point you to some facts, around more than a month ago, Business Insider ran a chart stating Microsoft’s online services division loss, a staggering loss of $711 million for the first quarter, this included Bing too.
Now, Microsoft did advertise Bing on both television and on the internet in a very bullish manner, however, do not expect that in itself to contribute towards the $711 million first quarter loss.
Considering that Microsoft pulled out Bing after the second quarter would definitely mean that their online services division has been looking at some very huge losses this quarter too, and most likely Bing cashback is a major contributor towards it.
Rest aside, Microsoft took a huge gamble with Bing Cashback and believe me it is in much larger use than Microsoft suggests, if you do not believe me, just take a look at forums which post about deals and you will understand what I am talking about.
What do you think is the real reason Microsoft stopped Bing Cashback, it is because of lack of use, or is it because of the dent the losses are causing into Microsoft’s revenue?
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Not sure why you say BCB would be a "major contributor" to the Microsoft's financial loss. All of the cashback rebates are paid by the merchants. I imagine MS has costs to administer the program … however these must be rather small compared to the overall Bing effort.
Here's the rub for me – I run a modest ecommerce store. We implemented BCB and loved it. It brought great traffic. To me, it was the primary differentiator between Bing and Google Base. I have a great opinion of Bing, in part due to BCB.
I don't get this move … it may not be a broadly used feature, but the people who do use it are big fans of the program. Seems like Bing just threw away one of its primary differentiators.
If Microsoft would have learned to manage their cashback program it could be profitable.
With this stop in their cashback program, I think they are looking at even more revenue lost and a loss in market share.
Of course, maybe they don't have the internal resources to figure out how to manage it, so they just decided to drop it.
I'm sure people will figure out how to keep getting cash back from their online shopping, it's just a matter of finding the right site.
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