Bill Gates,  Chairman of Microsoft announced a new plan to compete with Google, a move that is being promoted two weeks after the software giant abandoned the bid for Yahoo.

Microsoft wants to pay people to use its Live search engine and buy products through Live Search cashback. According to Microsoft, the initiative to attract users by paying cash is an attempt of the company to convince the advertisers that Microsoft has a viable plan for competing with Google in the growing market of online advertising.

“This is giving you a reason why you should use a particular search engine,” Gates told attendees at the Advance 08 advertising conference.

We’ll see if “Live Search cashback” works or not. This new program would attract more users, and therefore more advertisers; but some advertising executives have already said that they are not sure if this strategy would help Microsoft.

Google, whose revenues comes from the advertising market (with some additional sources like Google Apps for companies), is starting a new advertising online field: ads on RSS feeds. These feeds are “.xml” files which stay up-to-date with the latest posts published in blogs or web pages. The visitors can subscribe themselves by using specific programs or some functions in the new browsers, which include feed readers.

Google looks for all the possible ways to insert ads, including radio, YouTube videos and, of course, the ads on Internet. Up to now, the RSS feeds were almost ignored by advertisers, but they always have a great potential.

Feedburner is a RSS feed management provider that was bought by Google, one year ago (approximately). It provides feed promotion and optimization tools that can be used by webmasters and podcasters. The new type of advertising will be managed by AdSense and AdWords, which are services for webmasters, publishers and advertisers.

Bloggers can take advantage of this by using FeedBurner, which from now on will have a look and feel more like other Google services.