Observations on the Microsoft Live eBay discount - why are they doing this?
Posted by
Mop (aka rburriel)
Nov 17 '08, 08:32
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Why is Microsoft giving you money to buy stuff on eBay? Why SO MUCH money? And is eBay complicit?
Microsoft's hand in this is simple. They made no secret about it. When they announced it, they pretty much said it was an attempt to boost the numbers of Microsoft Live Search. And when you have pockets as deep as Microsoft, why not give people money to use their search engine? It makes sense for them and they have struck deals with numerous merchants for this cashback offer.
But while other merchants are offering cashback in the single digits (5-8%), eBay's giving back 25% (and has been known to give back 30% and more!) So what's the deal? Microsoft surely doesn't have a special deal with eBay. I suspect that eBay is padding the cashback offer, contributing some of their money to this deal.
The facts are these: You can apply the offer up to 12 times *per account* and although there is some vague language about discouraging the creation of new accounts, there has been little enforcement of this.
Basically, eBay is trying to get you to create a new account. New sign-ups is a benchmark for most internet sites. When new sign-ups are down, eBay's stock price suffers. This is a way for eBay to encourage people to create a new account without actually coming out and saying "we'll pay you to create a new account" (because analysts would not take kindly to this overt kind of manipulation). What surprises me is that analysts haven't noticed this yet. There should have been an asterisks on eBay's last quarterly report, yet the analysts were oddly silently.
Raul
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