Microsoft has announced Live Search Cashback that rewards users with cash rebates when they search for and purchase products from partnering online stores. Microsoft collects money from its partners, the advertisers on a CPA (Cost Per Action) basis. So this product shifts search advertising from CPC (Cost Per Click) to CPA and gives a lot of revenue back to the users. This is a desperate move by Microsoft to challenge Google which has 61.6% of the US search market share. Microsoft is third with under 9.1% of the total pie.

According to industry data, online retail in the United States is projected to grow to $335 billion by 2010. Today, 68 per cent of all those retail transactions begin at a search engine.

The Live Search cashback program features more than 10 million products from more than 700 merchants, including top U.S. retailers, Microsoft said.

Bill Gates, Microsoft's co-founder and chairman announced the initiative at the group’s advance08 conference in Redmond, Washington and said that the new program "will help advertisers drive more online sales while giving consumers a new way to stretch their dollars."

The technology is based on a system used by Jellyfish, the shopping and auction service, which Microsoft acquired in September 2007.