Microsoft to offer cash rebate for search engine use

REDMOND, Wash. (Reuters) - Microsoft Corp said on Wednesday it launched a new "cashback" search service that pays users a rebate for buying products they found through the company's Windows Live search engine.

Live Search cashback is the latest attempt by the world's largest software maker to draw users to its online search engine, which is a distant third behind market leader Google Inc and Yahoo Inc.

When a Windows Live search user looks for a product, they will get links to online retailers offering that product at a discount. If the user then buys that item from the retailer's site, the rebate will go into a cashback account set up by Microsoft.

Microsoft sees online search as a critical component to establishing an online advertising powerhouse. By placing text-based ads next to results from its ubiquitous search engine, Google has become the leader in Web advertising.

Microsoft shares slipped 3 cents to $28.73 in afternoon Nasdaq trading.