Old-school dot-com nerds -- like me -- will remember one of the earliest email hoaxes, which promised cold hard cash from Microsoft (NASDAQ:MSFT) if you simply forwarded a virtual chain letter. The bogus Bill Gates just wanted to test his email tracing program, that's all.

Well, life is imitating scam at Microsoft.

The world's leading software company is introducing SearchPerks, a frequent-searcher program that rewards loyal users with redeemable points that can be exchanged for prizes like Xbox games, music downloads, and airline miles.

Simply download a perk counter, and the first 25 searches a day through Live.com will earn you "tickets" that can be swapped for the goodies.

Is Microsoft so stumped in its gummy-mouthed nibbles at Google's (NASDAQ:GOOG) market share that it's treating us as if we're some sort of eyeball escort service? You bet.

It's desperate. It's hokey. Oh, and one more thing: It's brilliant, too.

Search here, make money
Microsoft isn't the first company to open up its coffers in the mad dash for searchers. IAC's (NASDAQ:IACI) iWon.com has been doing this for years with its lottery-based platform. Amazon.com (NASDAQ:AMZN) gave it a go with A9.com, giving frequent users a 1.57% discount at its popular online store.

If history is any kind of teacher, Microsoft is about to get its knuckles rapped. When's the last time you went to iWon? It is mostly a casual-gaming hub these days, along the lines of Electronic Arts' (NASDAQ:ERTS) Pogo but with more elbow room. And A9 suffered a grimmer fate -- it was axed two years ago.

This normally wouldn't bode well for Microsoft, but there are a few things working in the company's favor.

  • The soft economy is a tailwind. If you're going to perform searches online, why not go through Microsoft and get a free first-aid kit in three months or a deck of playing cards in two weeks?
  • Sites like iWon and A9 are -- or were -- fringe players. Microsoft's Live.com may be a distant third-place finisher, but that is enough to make it credible. Remember, wearing the bronze actually means you’re donning the silver medal in the anti-Google competition.
  • The bar to attain prizes is low. Since Internet users receive 500 points for signing up, they are really just a day of searches away from claiming five free music downloads from PureTracks.com.

It's a pity that it’s come to this, but what's wrong with buying your way out of a hole? Yahoo! (NASDAQ:YHOO) and Microsoft continue to relinquish market share to Google with every passing month. Stagnancy is not an option.


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Something is better than nothing
This isn't the first time that Microsoft has put its money where its site is. It rolled out Live Search Cashback in May, a loyalty shopping program that also rewards visitors with redeemable points.

The difference with Cashback is that it requires actual online purchases. Cashback is simply channeling existing players like Fat Wallet, UPromise, and United Online's (NASDAQ:UNTD) MyPoints, passing on a chunk of the affiliate marketing commissions to the actual buyers. Today's debut of SearchPerks will work even for Web users with holes in their pockets.

Google isn't going to break a sweat over this. With 63% of the search query market, Microsoft can't gift its way to the top. However, Microsoft isn't really aiming for the pole position at this point. All it really needs is to overtake Yahoo!, a vulnerable company that is in corporate disarray. Until it gets to the silver-medal podium, there's no point in whipping out its slingshot to take a shot at Googliath.

Hmm ... a slingshot. I wonder how many SearchPerks tickets it will take to get me one of those.

Other ways to spend time -- not money -- at Microsoft:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers selection. Electronic Arts and Amazon.com are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz has worked the math to realize that the Xbox 360 controller for 5,500 tickets is practically unattainable during the program's run through mid-April unless Microsoft introduces new ways to win tickets. It will. It has to. He does not own shares in any of the stocks 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.