REDMOND, Washington: Microsoft chief executive Steve Ballmer says the company "missed the power" of search advertising as it fell behind Google, a position it is trying to remedy by offering US users of its Live Search facility the chance to claim everything from clothes to air miles. 

The new Search Perks initiative allows users of Live Search to collect "tickets" each time they search, which can then be used to redeem items like online music (525 tickets) and T-shirts (1,100 tickets).

The scheme will operate until April 2009, with a limit of 250,000 consumers, and 50 searches a day. Users will also be required to install a piece of software to keep track of their search activity.

Ballmer said: "We probably missed the power of the advertising model, not so much the technology. Do I wish we'd started the investment in search a few years earlier? Yes."

"We may be the David up against Goliath, but we're working on it."

Microsoft has previously offered "cashback” to consumers who searched for items using Live Search and made purchases on particular sites, plus a Search Club, offering a selection of online games.

Data sourced from BBC Online (UK)/Financial Times; additional content by WARC staff