Is this what legendary investor Peter Lynch has come to? TechCrunch is reporting that the former frontman of the storied Fidelity Magellan (FUND: FMAGX) mutual fund has joined a group of seasoned investors buying a stake in Web upstart Jackpot Rewards.

I'm a huge fan of Lynch. I may not agree with the way that Fidelity is marketing the recent reopening of Magellan, but only because the company is piggybacking on Lynch's acumen in propping up the fund's historic returns, even though he hasn't had a hand in the portfolio for nearly two decades.

I just hope that investments like Jackpot Rewards don't indicate the current state of Lynch's market savvy. Granted, we rarely hear about what Lynch is buying and selling since he retired from active fund managing, but this one seems to go against the "buy what you know" mantra that Lynch often espoused.

Jackpot Rewards sounds promising in theory. Subscribers pay $3 a week, then shop through the site's collection of online retailers. Members get a portion of their spending back in the form of commissioned rebates. They are also eligible for weekly million-dollar drawings and low-probability lotteries for $100 million or more.

It sounds good until you consider the dues. Will anyone really pay $156 a year -- more than a Sirius satellite radio subscription -- for this? Amazon.com (Nasdaq: AMZN) offers its Prime membership at half that price, and it provides tangible rewards like free two-day shipping. Is Jackpot Rewards worth it? Before you defiantly nod, keep in mind that most of the site's offerings are available for free in other forms.

Sites like IAC's (Nasdaq: IACI) iWon.com and Electronic Arts' (Nasdaq: ERTS) Pogo offer random prize lotteries -- iWon just for conducting free search engine queries, and Pogo for playing casual games.

Then you have the loyalty-shopping model. Sites like FatWallet, Microsoft's (Nasdaq: MSFT) Jellyfish and United Online's (Nasdaq: UNTD) MyPoints have been running for years as free sites that share affiliate revenue with shoppers in the form of cash and gift-certificate rebates. Upromise will even bankroll college savings plans with online and offline purchases. Why pay for that privilege?

You'll find other fitting substitutes for site features like free classifieds (Craigslist) and the Deal of the Day (Woot.com).

If there's anything positive to say about signing up for Jackpot Rewards, it's that someone will win those weekly $1 million drawings. If the response is as lukewarm as I expect, the odds will be pretty good for the few who sign up until the site lowers the prize money, scraps the subscription model, and comes back with a competitive product.

What were you thinking, Lynch?

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Longtime Fool contributor Rick Munarriz invests mostly in stocks but always has a mutual fund or two in his portfolio. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.