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Apr. 1, 2008 at 6:49am Eastern by Danny Sullivan
Microsoft's $1 Million Guarantee Program To Win Searchers
Microsoft executives, worried that the plan to acquire Yahoo for an estimated $40 billion might not happen, have hatched an alternative plan that might bring about success over Google at a much cheaper cost. To win in search, Microsoft may pay people not to use Google. And pay a premium, up to $1 million per year, over the next three years, to anyone within the United States.
Called the "$1 Million Guarantee Program," the initiative will reward anyone within the United States that agrees to have web surfing monitoring software hooked to their computer. To allay privacy concerns, the software will watch for only one thing -- use of Google and other non-Microsoft search engines.
Under the program, people can earn up to $1 million per year if they exclusively use Microsoft's search products. The program is open to any US resident aged 6 and above. There will be some provisions for "accidental" or "occasional" visits to non-Microsoft services. But by and large, the deal is that by being exclusive to Microsoft, Microsoft will reward users with cold hard cash.
Absurdly expensive? It can seem that way at first, but consider the math. There's an estimated 300 million people living in the United States. If you pay each one $1 million for the next three years, that's just under $1 billion. That saves Microsoft $39 billion compared to what it was going to spend on purchasing Yahoo.
The US isn't the limit for Microsoft rebels behind the plan. The world population is just under 7 billion. Give each person $1 million for three years and that's still only half the price of purchasing Yahoo. However, Microsoft figures that it could use a sliding scale for some countries. Where the cost of living is less expensive, less would be given out. And places where the US dollar is not longer worth as much (Australia, Canada, the United Kingdom, the European Union .... it's a long list), slightly more might be given.
The main reason Microsoft plans to start with the US are the legalities. So far, they can't find any US law that would prevent them from paying for exclusivity in this way. Technically, they aren't paying for people NOT to use Google. They're paying for people to be loyal to Microsoft, which would seem to clear some regulatory hurdles. After the US, they would examine issues with other major markets.
So far, there's no reaction from the Google side. Google's issue is that it has far less cash on hand to use to bribe people for loyalty. Instead, Google's been relying on simply giving products away, such as Google Docs that just gained offline access today (and see here). But with cold hard cash being offered by Microsoft, especially during a time of economic turmoil, Google might face the most serious challenge in its history.
Microsoft's plans are still a work in progress and yet to be approved. If they are, the hope is that the program will be formally unveiled a year from today, April 1, 2009.
Postscript: Of course, one fatal flaw in this plan. The math makes no sense at all. At $1 million per person for even one year, it's like $300,000,000,000,000. I don't even know what you call that. $300 trillion? Just $10 per person for one year would be like $3 billion. If I'm doing the math right. And I'm probably not. Did I mention being an English major?
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