NEW YORK (Bloomberg) — Google Inc., owner of the most popular Internet search engine, fell the most in three months in Nasdaq trading after rival Microsoft Corp. unveiled a plan to give cash to people who shop online using its search engine.

Users who buy products such as coffee makers and shoes through Redmond, Washington-based Microsoft's Live.com search platform can get rebates of 10 percent or more under the programme announced yesterday. The rebates will be offered for more than 700 businesses.

The plan may draw more customers and online advertisers to Microsoft, which lost US users to Google last month. Google gets 99 percent of its revenue from online advertising. On May 3, Microsoft abandoned a $47.5 billion bid to buy Yahoo! Inc., operator of the No. 2 search engine, to boost its online advertising business.

"If Google has to follow suit in any way, that could impact Google and specifically impact margins," said Clay Moran, an analyst at Stanford Group Co. in Boca Raton, Florida. "It's a reminder that Microsoft's very serious about this and is willing to take lesser economics to gain market share."

Google, based in Mountain View, California, dropped $28.61, or 4.9 percent, to $549.99 at 4 p.m. New York time in Nasdaq Stock Market trading, the biggest drop since February 1. The shares have lost 20 percent this year.

Microsoft's plan to charge advertisers each time a user makes a purchase instead of for each click on an advertiser's web link could lure business away from Google, said Moran, who recommends holding on to Google shares.