Aside from generating savings for participating shoppers, Microsoft's Cashback program is drawing more advertisers and higher conversion rates for Live Search. But is Microsoft boosting its search share against Google? Quite possibly not.

It's costing Microsoft a bundle. But the Cashback program for Live Search might possibly be helping to meet a self-identified need to boost the company's position in the search market versus Google. The answer depends on what's being measured, and by whom.

Under Cashback, shoppers who buy consumer electronics, computers, clothing, and other goods located through Live Search searches get discounts from Microsoft of anywhere from around two to 15 percent on prices that have often already been reduced by retailers, anyway. Once the Live Search savings reach $5.00, Microsoft hands the money back directly to the consumer, paying out through the user's choice of check, direct deposit, or Paypal.

Using technology gained through Microsoft's Jellyfish buyout, Cashback was born last May. Before and since, Microsoft CEO Steve Ballmer has made very public about Microsoft's wishes to unseat Google from its overwhelming lead in the search market. At a speech in September in Santa Clara, CA, Ballmer reportedly said that Microsoft will keep sticking to that goal, even if it takes a lot of time and money. But he also said that, in order to succeed, Microsoft will need to "redefine" the search category.

On Thursday, Microsoft said it has been taking in an average of 4.5 million unique Cashback visitors per month since starting the program -- and that the number of products now offered through Cashback now totals around 1.3 million. And in other statements that aren't that difficult to verify, Microsoft said that 20 of the top 50 online retailers in the US and 140 of Internet Retailer's top 500 are now taking part in the program. New advertisers such as AT&T, Drugstore.com, Banana Republic, Kmart, and Saks Fifth Avenue were mentioned.

But Microsoft also announced that since the program's rollout in May, Cashback has shown "positive traction" on three "key metrics:" number of offers in the system, advertiser return on investment (ROI), and "percentage of commercial search queries as measured by Comscore, Inc."

The press release didn't directly define what the reference to "commercial search queries" means. Nor did it provide any metrics from comScore or other sources as to search share as typically measured by the firm. Microsoft seems to be referring not to conventional search share but to some new category of metrics just invented -- or maybe, as Ballmer might put it, "redefined."

Cleverly tucked into Microsoft's press release is the following paragraph:

"In addition, according to a custom comScore study [emphasis ours], in the second quarter of 2008, Microsoft Live Search referred almost 12 percent of total U.S. commercial online transactions and about 13 percent of total U.S. online spending among key retail categories. Microsoft Live Search placed among the top two U.S. engines in five of the 10 key commercial categories for conversion rate, including Computer Hardware, Movies & Videos, Home & Garden, Music, and Travel. Microsoft Live Search also shows a competitive advantage in attracting high-quality and high-spending buyers. Microsoft Live Search ranked as the top engine among the competitive set by a large margin in dollars spent per buyer, across the combined 10 key commercial categories."

In a press release issued last August, comScore said that Microsoft's share of searches at US "home/work/university locations" actually dropped, from a total of 9.2% in June 2008 to 8.9% in July.

For its part, Experian-owned Hitwise reported in August that Microsoft's share of "all U.S. searches"-- including Microsoft's Live.com and MSN Search, but not including Club.Live -- amounted to 5.36% in July, a slight decrease over the company's 5.46% share in July of 2008 and an even larger fall from the 8.79% share received in August of 2007.

In September, Hitwise put out another press release, showing further slides for Microsoft in August from both the previous month and the previous year. Neither comScore's nor Hitwise's statistics for successive months have yet been made available.