Microsoft Chairman and Co-founder Bill Gates is getting ready to take on both Google and Yahoo in the online advertising space. Being the dominant search engines on the market, Google and Yahoo abuse their position by supporting online advertising models that fail to account for the real value of the ad or offer any compensation for click fraud. And of course that Gates has the answer, a new advertising model based on transaction confirmation via customer points.
"Conventional search engines providers usually sell the ad space to the highest bidder based upon a pay-per-click (PPC) scheme and/or set the fee for the ad space according to a click-through-rate (CTR). However, these schemes have proven to be counterproductive for both consumers and advertisers, and ultimately inefficient to the search engine industry as well. These schemes or business models are anti-competitive as evidenced by the extremely high profit margins of the top two search engine providers. However, the market share for these search engine providers continues to increase, establishing an information monopoly," reads a fragment of the patent filed by Bill Gates along with Jain Kamal.
Still, the Microsoft patent co-authored by Bill Gates is just one of the examples associated with the Redmond company's efforts to reinvent the online advertising models in order to gain the edge, and put an end to the drastic Google-Yahoo domination. Microsoft has filed a collection of patents designed to tailor fit the online advertising business to its own vision.
Still one of the major issues with online advertising at this time is fraud, users abusing the pay-per-click and click-through-rate models without finalizing a single transaction. Microsoft proposes a system to verify that a transition did in fact occur. "A mechanism is provided to confirm transactions even without monitoring them e.g., by issuing perishable, non-redeemable points to a merchant based upon an advertising budget. The points can then be issued as redeemable points to a customer, e.g., based upon the customer makes a purchase from the merchant. Points transferred to the customer can verify that a transaction occurred, and can be redeemed for products/services, including a convenient "micro-payment" mechanism," is added in the patent signed by Gates.