To briefly review recent news: Microsoft is going to allow advertisers to set a “cashback” reward to consumers for purchases that originate from ads on Microsoft Live Search.

Think about the quality of companies that currently incentivize users to participate in advertising:

Microsoft should be embarrassed to join that list of companies.

Some naysayers might argue that the list above is about CPC arbitrage; whereas, Microsoft’s new offering is essentially cutting consumers into the loop on CPA revenue. Ok, then we should change the list to the “Big Three” companies that dominate the Affiliate Network world:

Again, Microsoft should be embarrassed to join that list. These are ad networks of last resort for publishers, and they end up powering a lot of product-oriented splogs. Is joining this list seriously Microsoft’s silver bullet to beating Google?

Granted, Performics is technically a part of Google at this point, but I don’t believe that the Performics asset was a motivating factor in the DoubleClick acquisition. Google acquired DoubleClick because it was the fastest way to get a foothold in the display ad world. Considering Google’s recent aggressive actions to either lower the pagerank or de-index spammy affiliate network driven splogs, I think Google recognizes that paying anyone other than publishers is a slippery slope towards inauthentic engagement with ads.

Yet, I feel like I’m taking crazy pills. Based on the relatively positive (or at least curious) initial reception to Microsoft’s new CPA strategy in the blogosphere, it’s not obvious to others how silly this idea is. I can’t think of an example on the web where paying an end-user (the consumer, the browser)
has ever turned into a big business.

Paying end-users to do anything online consistently results in people gaming the system, automating clicks, or developing arbitrages that pollute the online ecosystem. Why should we expect Microsoft’s latest CPA initiative to be any different?