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The company is offering up to 30 per cent of the purchase price for any time found and bought via its product search.

Microsoft's search engine is currently a distant third place behind Google and Yahoo, and chairman Bill Gates is hoping the cashback initiative will help it make ground on its rivals.

"This is giving you a reason why you should use a particular search engine," he said at the company's Advance 08 advertising conference.

Product searches via Windows Live will call up links to online retailers offering the specified item. Registered Windows Live users can claim their two to 30 per cent rebate after a 60 day waiting period, to ensure there are no returned products. Gates said the scheme is in partnership with over 700 retailers including eBay, Sears and Home Depot.

Meanwhile, the software manufacturer is trying to step up its internet presence and has re-approached Yahoo with an unsolicited offer to buy Yahoo's search service. Microsoft's previous offer of $47.5 billion was not accepted by Yahoo.