Will the next financial settlement out of Microsoft (NASDAQ:MSFT) go to visitors to its MSN.com search engine? No, there aren't any lawsuits at play here. We're talking about the possibility of Mr. Softy beefing up its search-engine business by paying its users for their time.
Depending on where you stand, this may sound like the most ridiculous business plan you've ever heard, or a brilliant strategy to swipe market share from Yahoo! (NASDAQ:YHOO) and market leader Google (NASDAQ:GOOG).
Monday's Wall Street Journal reported that Bill Gates, while in India last week, was pitching the possibility of making its search engine a rewards-based vehicle. Whether users would receive cash, free software, or some other form of compensation, it would certainly be a bold move.
Reward-based portals haven't exactly had a stellar record. Remember iWon.com? It's part of the IAC/InterActive (NASDAQ:IACI) family now. The company that was once a key advertiser on the Howard Stern radio show has given away more than $64 million over the years, but it certainly doesn't have the popularity to show for it.
In fact, if you want to party like it's 1999, the two most popular sites over that year's holiday season -- after Amazon.com (NASDAQ:AMZN) -- were Webstakes.com and MyPoints. Those sites are still around, but they're no longer the dominant destinations they once were.
That's why the odds are stacked against Microsoft in that regard. Folks may love a good lottery, but searching for something is serious business. To Microsoft's credit, it's definitely got worthy search engine technology. It may not be Google, but it's not iWon.com either.
So color me intrigued on this one. To be honest, I doubt that Microsoft would be dumb enough to offer folks actual money for performing searches on its site. That would be a colossal mistake; fraudulent clicks could easily dry up its base of legitimate advertisers.
However, if Microsoft bases its compensation on actual conversions -- a self-empowering affiliate rewards program like MyPoints -- it would certainly make things interesting. Offering or unlocking free software to regular users also has some merit. With Microsoft's vast size, tech savvy, and deep pockets, either of those approaches would worry me if I were Yahoo! or Google.
Microsoft is clearly taking the Google threat seriously, and I don't think that's the kind of open-market gesture that should be discounted. Or ignored.
Microsoft is a Motley Fool Inside Value recommendation, and Amazon is an active Motley Fool Stock Advisor pick.
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Longtime Fool contributor Rick Munarriz hates to see good companies duke it out, even when he has ringside seats. He does not own shares in any of the companies mentioned in this story. Rick 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.
