San Francisco  - Microsoft on Wednesday unveiled a new plan to offer cash-back discounts of up to 6 per cent to customers who buy products using the company's search service.

Microsoft founder Bill Gates unveiled the program at a conference for advertisers at the company's Seattle area headquarters. The plan aims to use Microsoft's vast cash reserves to help it draw customers away from Google and cut into that company's lead in online advertising and software.

Under the plan, shoppers who search for and purchase an item through Microsoft's Live Search will be eligible for discounts of up to 6 percent with Microsoft's new "cashback" program. Items eligible for cashback discounts will be labeled with a gold coin logo.

Current offers include savings of 5 per cent, or about 6 dollars, on a 130-dollar Canon PowerShot A470 digital camera or a 20-dollar discount on an Acer Aspire 5100 laptop.

Microsoft clarified that there will be a 60-day waiting period between the date of purchase and the actual payout in case the items purchased are returned.

To sign up, users 18 and older must create or have a Windows Live ID and cashback account, and provide a valid e-mail and street address.

The program was launched after Microsoft dropped its 47.5-billion- dollar bid to buy Yahoo. Despite the failure of that initiative the two companies are still talking about other areas of cooperation, Microsoft announced Sunday.

According to the New York Times, Microsoft proposed buying Yahoo's search operation, a sale of Yahoo's lucrative operation in Asia and the purchase of a minority stake in the remaining areas of the company.

Yahoo is also under pressure to revive its sale negotiations with Microsoft from a group of renegade shareholders led by corporate raider Carl Icahn. (dpa)