Earlier this week it was reported in the Wall Street Journal that Microsoft chairman Bill Gates is considering rewarding users of MSN Search with some of the advertising revenue (or free software or other content) from MSN’s search business. An interesting idea for sure. A couple of thoughts on this…

Almost two years ago, Bill Gates predicted the end of spam in two years [Feb 2006]. How? Well, he floated the idea that recipients of e-mail should be paid for receiving unsolicited e-mail [a.k.a spam]. The idea was that e-mail marketers would think twice about sending spam if they knew it would cost them. However, legitimate, well-known corporations would still send out spam and chalk up the cost of paying users as a marketing cost. At least the recipients would have some incentive to read the spam and be rewarded appropriately. A customer loyalty program of sorts. Taking the idea one step farther, the thought was that the more shady bulk e-mailers would not be able to compete with the added costs of spamming [which is all but free] and eventually die off leaving only the “legitimate” companies to spam people.

One problem with both ideas, a problem that killed the spam idea and will likely be the death of sharing ad revenue with consumers, is the issue of payment. How to pay them? How often? In what currency and what exchange rate? How do you prevent the equivalent of “click fraud”? Presumably, each user-generated MSN search would give the user a fraction of a penny of revenue which at some point would have to paid out. Theoretically, that would add up over time, but how much time?

But there was another important piece to Gates’ comments. Maybe the reward wouldn’t be cash only or even cash at all. Maybe Microsoft could offer free software and/or free content in exchange for using their search engine [read: in exchange for viewing ads]. We happen to think this is a great idea which is why we’ve been doing it for almost six years.

We agree with Mr. Gates that many consumers are happy to be “paid” for seeing advertisements. What will be interesting to see how Microsoft will track it all and protect itself and it’s partners from “search fraud.” Can they do it without requiring a downloadable adware application? We’ll have to wait and see.