These are early days, but a new e-commerce model may emerge as Microsoft launches its Cash Back program. Those who use Microsoft's Live Search to find retailers and shop with them will find a portion --- pretty small, but a portion --- of their spend in turn tucked away in a PayPal account. Once the account reaches five dollars, it's possible to redeem. All along many have speculated that some sort of micropayment program would be the catalyst for e-commerce. Amazon and others already have associates programs to encourage sites to direct traffic and business their way, but outgoing CEO Bill Gates is suggesting Microsoft's effort may help shape a new model for both advertising and shopping. Clearly this program can more accurately track the relationship between user attention and user consumption and charge advertisers more precisely on the basis of what's purchased and not just what's viewed. In any event, it's a plan that occupies attention as Microsoft figures out what to do --- or not --- with Yahoo! Incoming Microsoft CEO Steve Ballmer has indicated there's no longer interest in buying Yahoo!, but won't discuss possible deals for parts of the company.
I have no idea if this model will catch on or not, it's been in use for a year or so at an odd little shopping site called Jellyfish (http://www.jellyfish.com) that combined shopping, search, deal aggregation and this payback scheme - and then grafted on a whole social networking aspect. Has to be seen to be understood (and believed). They were bought by Microsoft last year so they could get their hands on this system they're now rolling out. At first glance it seemed kind of weird, but then I realized we're doing already with affinity credit cards, with Air Miles, and, fifty years ago, with Greeen Stamps. Plus ca change...
Given the relatively low-key announcement, I'm not sure this is the big app. But these kinds of micropayments appear to be intrisic to the e-commerce models.
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