* A good way to measure the potential recruit skills
* Gives a good fun experience to go over later at the interview, both verifying it is the recruit who coded it and setting common background beforehand
* You get people who showed some interest in your company, seeing the contest
* You get people who are interested in hacking around puzzles
 (I don't know if scribd sees it that way)
Even if they don't "win", they are greatly superior than a normal resume pusher.