It appears that the offering, which was based on technology developed by Jellyfish.com, a company Microsoft bought in 2007, didn't do as well as hoped.
Microsoft attracted more than 1,000 merchant partners who offered cash back to shoppers, said Yusuf Mehdi, senior vice president for Microsoft's Online Audience Business Group, in a blog post. "But after a couple of years of trying, we did not see the broad adoption that we had hoped for," he wrote.
Cashback will be available to users until July 30. After that, users will have a year to redeem any cash they earned through purchases.
While the concept of Cashback sounds attractive, it also has a fair amount of complexity and that may have kept users away, said analyst Greg Sterling of Sterling Market Intelligence. Users had to sign up and then understand how and when they would get the cash back, he noted. Plus, some people may have thought it sounded too good to be true. "There's an inherent skepticism that people bring to this," he said.
It's possible the amount of cash being offered wasn't enough to attract more users and maybe the merchant partners didn't do enough promotion, he said.
In addition, Microsoft could be in the process of examining its many search initiatives in an effort to discontinue those that aren't paying off. "I would guess it has to do with a lot of the rationalization Microsoft is doing given that they have to take on the Yahoo search platform," said Richard Sim, vice president, product management and marketing at Anchor Intelligence. He said Microsoft appears to be working hard on the integration with Yahoo and so may be looking to trim off unnecessary projects.
Grand Plan Abandoned
Cashback was once central to Microsoft's push to position its search engine as one that was ideal for shoppers. It was also a service that Microsoft founder Bill Gates seemed particularly fond of. He often spoke about the potential for the offering to draw people to Microsoft search.
In May 2008 when the service launched, he described Cashback as a new advertising platform. Search advertising offers essentially nothing in return, compared to advertising on TV or radio, where users get content in return, he explained. Cashback "gives you a reason why you should use a particular search," he said at the time.
Cashback launched with some marquee names including eBay, Barnes & Noble, Sears, Home Depot, Zappos.com and Overstock.com. It launched with 700 merchants, so it grew only nominally over two years.