Microsoft is retiring Bing Cashback at the end of July, a program that over a thousand retailers - and eBay - used to drive traffic to their sites by offering cashback to shoppers searching on Bing's search engine.

Bing displayed retailers' ads alongside search results, and shoppers would be taken to the retailer's site when they clicked on the "gleamed" cashback advertisement. Bing Cashback was an invitation-only program for large advertisers.

While eBay users generally liked Bing Cashback - sellers saw traffic to the site, and buyers liked the good deals - it was not without a few controversies. One involved eBay sellers' creative use of the program to earn extra cash (this reminder comes from The Register), and in 2009, shoppers encountered difficulty in actually getting cash from Microsoft (eBay Shoppers Still Waiting for Microsoft Live Cashback.)

Microsoft cited low adoption of the program as its reason for ending the program. But merchants say the company will introduce a new feed program this summer, presumably similar to feeds merchants send to Google Product Search or comparison-shopping sites.

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Update: Sandeep Aggarwal, an analyst now with Caris and Company, said the retirement of Bing Cashback will increase the search cost for eBay in new customer acquisition, and estimated eBay's GMV from Bing Cashback as no more than 1.5% to 2% of total GMV.