Swagbucks - A Frugal Take

A 101 primer to bring to speed those not familiar with Swagbucks, - it is a search engine that promises “swag bucks” as gratis for conducting searches using their search engine interface. These swag bucks can then be traded for gift cards and other products available at the Swag Store – buying power varies – an Amazon.com $5 gift card can be purchased with 45 swag bucks while an iTunes $15 gift card costs 145 swag bucks. Swag bucks are sometimes referred to as digital dollars which is a misnomer – one swag buck dollar roughly equates to 12-15 cents and cannot be converted to real money – merchandize or gift cards has to be purchased from the site to realize the value.

Swagbucks the brainchild of Prodege LLC, is an LA startup specializing in “branded search engines”. Branded search engines allow for swag bucks to be earned and exchanged in the “store” portion of the site to buy brand related merchandize. Akin to the Google or Yahoo search toolbar, a branded search engine tool bar can also be downloaded and plugged into the browser for single click searches allowing for easier use. Other popular such sites include searchwithkanyewest.com, searchwithbeyonce.com, and searchwithrandymoss.com. The home page for Swagbucks is comparable with its branded counterparts where users accumulate credit and redeem them on a variety of merchandize.

The business model of Swagbucks is not complicated. Search interfaces like Google, Yahoo, MSN, and Yahoo clearly differentiate between organic and sponsored search results. It is this distinction that holds supreme the search engine’s ranking of the importance of a page based on the search string – interleaving this result set with sponsored links defeats this purpose. This is the niche exploited by the likes of search engines as Prodege: they return interleaved results and rewards users for that inconvenience. They license the search technology from two of the big search engine providers but the licensing fee, rewards to users, and the company’s business profitability are supported through sponsored interleaved links in the site. Hinged on this interleaved nature of the links is the expectation of much higher and relevant click-through rates and fees. The screen shots below display how Swagbucks search engine result screen compare to that of Google for the same search string:

SwagBucks Top Five Results Display for "Investing 101" search:


Google Top Five Results Display for "Investing 101" search:


Summary and Recommendation:

Our history with Swagbucks is now in its fourth month. Google is still our primary search engine, but we frequent the Swagbucks toolbar we have in place. In these four months, we earned close to 250 swag bucks and availed Amazon.com gift cards from the site – please refer to our tweets at twitter.com for a history of our gift card redemptions and earnings pattern. The reward is indeed a draw else there is little rhyme and reason to venture past one’s primary search site (Google or one of the other big search interface providers). There is no denying that additional time is spent on sifting the organic results in the site and the time value of money may not be justified in the earnings through Swag Bucks. However, with buying decisions, Swagbucks searches can be complementary – in the research phase of a buying decision, the primary search site can provide relevant material quickly and once the buying decision is in place, Swagbucks turn interesting as they also deliver vendor offerings in an interleaved manner.

To recap, the inclination to use the Swagbucks site for routine daily searches for information is best curbed at the very onset as significant time can be spent sifting through sponsored results. Likewise, in the research phase of a product buying decision, a better option is the primary search engine. However, once a buying decision is made, our recommendation is to use both search engines to arrive at the best deal possible. We will continue to use Swagbucks in this manner…

3/2010 Update: As of 2/25/2010, SwagBucks was inflated by 10 times. Previously, you needed 45 SwagBucks for a $5 Amazon.com Gift Card. Now, it will take 450. The good news is that your existing SwagBucks and new awards are also inflated by 10 times and so there is no real change.

Last Updated: 3/2010.





No comments:

Labels

401k (15) Advanced Placement (4) airlines (2) Akre Capital Management (7) AP (4) apartments (2) Appaloosa (7) Bangkok (2) barbuda (2) Baupost (2) Baupost Group (9) bay area (2) BDCs (3) Benjamin Graham Model (2) Berkshire Hathaway (18) best sites (9) Bill Ackman (11) books (4) Bruce Berkowitz (11) Camcorders (3) canada (4) cancun (3) CANROYs (7) carl icahn (7) Carl Ichan (2) casino (3) Casio (2) CEF (2) Charles Akre (6) Class Action Settlements (2) Consumer Product Reviews (30) coonoor (2) Covered Calls (3) credai (4) Credit (1) David Einhorn (14) David Swensen (9) David Winters (7) DCF (2) Digital Piano (3) dry bulk shipping (2) Education (37) Egypt (2) Elementary Education (10) Elementary School Textbooks (5) eReaders (2) ESPP (6) ETF (2) ETN (2) Everyday Musings (61) Exam Prep (7) Exiting the rat race - how to? (19) Fair Value Estimates (4) Fairfax Financial (3) Fairfax Financial Holdings (7) Fairholme (11) Family Office (3) Financial Independence (93) Flash Camcorders (3) flat (4) flats (2) Flip (3) free (17) Frugal Living (35) Fund Holdings (244) futures (2) gambling (3) garmin (2) Genting (2) george soros (12) giveaway (15) Glenn Greenberg (8) gps (4) Greenlight Capital (14) Guitars (3) Hedge Funds (263) High School Education (7) High School Textbooks (6) hobby (47) home ownership (5) Homes (18) Homeschool (18) Houses (2) Housing (3) Hykon (2) Ian Cumming (9) Infinuvo (6) Investment Research (10) Investments (7) iRobot (3) Jerusalem (2) John Paulson (9) Joho Capital (7) Joseph Steinberg (8) Kakkanad (4) Kawai (2) Kids (73) Kids Yamaha (3) Kindle (2) Korg (2) Kuala Lumpur (2) KWA (2) laptop (5) Las Vegas (2) Leucadia (2) Leucadia National (7) Lou Simpson (7) Middle School Education (4) Middle School Textbooks (3) Mini Notebook (2) Mohnish Pabrai (13) mortgage (2) Music (6) Mutual Funds (4) Netbook (3) Notebook (2) Oahu (2) offers (2) online tax (3) passive income (7) Paulson and Company (6) Pershing Square (11) philately (61) Piano (9) Prem Watsa (9) product reviews (11) R2I (24) R2I Finances (3) R2I Housing (5) Raising Kids (63) Rat Race (15) reading (5) real estate (6) Reducing Expenses (2) REIT (3) Reviews (81) Robotic Vacuum (2) Roland (2) Roomba (8) Services - Reviews (34) Ski (5) Sled (4) Solar Stocks (13) Soros Fund Management (8) Southwest (2) SQ Advisors (7) stamp collecting (40) stamps (20) Stanley Druckenmiller (7) Statue of Liberty (2) Stock Analysis (82) stocks (3) summer (2) tax (5) Teacher's Editions (5) Technology (4) Test Prep (11) Time Square (2) toy train (1) Travel Reviews (68) trip report (19) UNESCO World Heritage (1) Vacations (28) value investing (9) Video (3) Warren Buffett (17) wilbur ross (9) Wintergreen Advisors (7) Yale Endowment (9) Yamaha (7)

Google Analytics