Microsoft announced it would begin offering ad-funded cash rebates to customers who find and purchase their favorite products through a new program called Microsoft Live Search cashback. Key partners include eBay, Barnes & Noble.com, Overstock.com, Sears, Zappos.com, and WPP. The complete Live Search cashback product portfolio includes more than 10 million product offers from more than 700 merchants, including more than 13 of the top 40 U.S. retailers.

In Microsoft's press release announcing the new program, eBay President and CEO John Donahoe said, "By combining eBay's marketing expertise and incredible volume and velocity of trade, PayPal's leadership in online payments, and Microsoft's cashback program, we see a great opportunity to deliver more value in the eBay marketplace."

While the release says eBay is a key partner, it doesn't explain in what way. eBay is not included in the list of participating stores, and the FAQs section says the Microsoft service can't guarantee the purchase would be reported to it correctly if the consumer uses alternative payment methods such as PayPal and Google Checkout, noting, "We're always looking to improve our service and will continue to work to support other alternative payment methods in the future."

A report on Seeking Alpha says the rebates will be paid to consumers via PayPal, direct deposit, or mailed by check.

Live Search cashback is built on technology and partnerships acquired through Microsoft's October 2007 purchase of comparison shopping site Jellyfish.

http://www.live.com/cashback