Consultant Michael Chaney put the check up for auction Sunday to raise money for a charity of the bidder's choice, pledging to match up to $2,000.
Chaney said he had no idea his check would fetch much more than its face value.
But as word got out today, the check quickly became a hot item. By 3 p.m. PST, a registration site put in a bid for $2,500 for the check.
"This is a great way for us to purchase a physical reminder that without attention to detail, big things can go wrong," Richard Lau, president of the registration site YourNameFree.com, said in an email. "Besides, when else will we get the opportunity to have a check from Microsoft?"
The episode began Christmas Eve when Chaney, a Linux consultant from Nashville, Tenn., was denied access to his Hotmail account.
He learned through Slashdot, an online discussion group, that Microsoft failed to pay the $35 fee to Networks Solutions for the Passport.com Web address, which had expired Dec. 24. The Passport.com site verifies user identification and passwords for access to Hotmail and about 25 other services.
When the domain name lapsed, some users seeking to access their accounts received error messages indicating the domain was unavailable.
Chaney then went to the Network Solutions site and paid the fee with his credit card.
"I didn't do it to help Microsoft," he said in an interview this morning. "I did it to help the Hotmail users."
Microsoft representatives could not be immediately reached for comment.
Chaney said he was surprised to see the amount on the check when he received it via Airborne Express Saturday morning.
"I knew they were sending me a check, but I didn't know what the amount would be," he said. "They always just referred to it as 'the check.' I didn't know if it was going to be $35 or $15 or what."
Chaney said he never intended to cash the check. He put the item up for auction on Sunday, and it will remain open to bidders for another nine days.