Quite a gimmick, though Live Search Senior Director Frederick Savoye says SearchPerks, like Cashback, is actually part of Microsoft’s (MSFT) grand plan to “innovate the [search] business model.” If that’s so, the company might want to rethink it. Because Cashback really hasn’t done much to bolster Microsoft’s laggard search service, which remains a very distant third in the search market. According to Nielsen Online’s MegaView search ranking for August, searches on MSN/Windows Live declined 23.8 percent year-over-year. Its August 2008 share of the search market: 10.7 percent.

A 23.8 percent YoY fall in searches doesn’t seem like much of an innovation to the search business model. And with its search market share in decline, Microsoft clearly needs something more than a steady stream of gimmicks to stem the bleeding. Said Collins Stewart Internet analyst Sandeep Aggarwal: “Internal initiatives at [Microsoft] need time to lift off and prove their merit, but sooner or later the company will have to face the realities and decide again if a combination with [Yahoo] can speed the process.”

None of this has helped. None of it has bolstered Microsoft’s laggard search service, which continues to toddle along behind Google (GOOG) and Yahoo (YHOO)–a very distant third in the search market. In fact, MSN/Windows Live seems to be suffering from the company’s efforts. According to Nielsen Online’s MegaView search ranking for July, searches on MSN/Windows Live declined 2 percent month-over-month and 10 percent year-over-year. Its July 2008 share of the search market: 11.9 percent. Meanwhile, Google gained a share point from June to July, claiming 60 percent of the eight billion searches conducted during the month. And it posted 16 percent year-over-year growth, more than five times the overall growth in search.

Clearly, Microsoft’s efforts to draw users to MSN/Windows Live has yet to make much of a difference in the search share race. Nor have the efforts of other companies. Searches on Yahoo dropped 11 percent year-over-year, leaving the company with a 17.4 percent market share. AOL’s (TWX) fell 9 percent over the year, leaving it with 4.6 percent market share. And Ask.com’s (IAC) rose 13 percent, leaving it with 2 percent share, Nielsen said.