Techcrunch just broke the story that Microsoft is announcing Wednesday the option of allowing users to get a cut of the purchases they make found through Live.com. Microsoft now competing on price? Really?

Taking their first featured case study, the Canon PowerShot A470 Digital Camera, I compared the Live.com Cashback up-to-the-minute offering to Amazon and Google. Microsoft acquired Jellyfish last year (and Compete.Net many years before that) and mentioned this in their product roadmap ever since. The end result is underwhelming.

Amazon’s price for the same good, while allowing you to select the color, and not wait until your cashback hits $5 is within $2 of the lowest post-cashback price. If you’re looking to buy on price alone, Google triumphs as its a better search algorithm trumps a product roadmap and M&A activity-driven strategy to bring the lowest price of all.

Does Microsoft really want to compete on price with all the dangers that entails…and still lose?

Screenshots from 12:20 AM May 21 2008 of the three services follow (click to enlarge):

Google:

Amazon:

Microsoft: