It's hard to find anything online without looking unless you're talking about ads. LookSmart helps publishers, advertisers, and consumers see what they want when it comes to online advertising. The company earns most of its revenue through its Advertiser Networks offering (AdCenter), which provides advertisers with targeted, pay-per-click search advertising, contextual advertising, and banner products. It also offers Publisher Solutions that help content publishers maintain advertiser relationships online. LookSmart completed its transition to a full-on provider of advertising and publishing services after a couple of years spent divesting its non-core consumer website assets.
Back in the dot-com heyday, LookSmart was a major player in the Internet search market. However, the firm took a major hit when Microsoft ended its relationship with LookSmart to roll out its own search technology and ad serving network. Today, LookSmart survives as primarily a provider of lower-cost pay-per-click ads to customers other than the Big Two search engines -- Google and MSN's Bing (which powers Yahoo!).
LookSmart places ads from aggregators such as Oversee.net, Affinity, Advertise.com, Bravenet Media, and LeadImpact across dozens of search sites, including Ask, AOL Search, Lycos, Excite, and Altavista. Customer IAC/InterActiveCorp accounted for 7% of LookSmart's net revenue and 69% of Publisher Solutions revenue in 2010.
While revenues declined in slightly in 2010 compared to the previous year, the company's net income shot up and it completed its first profitable year since 2007. LookSmart attributes its positive earnings to its lowering traffic acquisition costs while increasing its traffic quality. In 2010 it introduced new pricing models, transitioned to a new data center facility, and relocated its corporate headquarters in order to lower operating expenses.
The company completed the disposal of its consumer websites (such as bookmarking service Furl.net) in 2009 in order to focus on its core advertising network and publisher services operations. The previous year it discontinued its Wisenut search engine technology. The company's exit from these businesses followed its 2007 sale of FindArticles.com, an online repository of articles from magazines, newspapers, and academic journals, to online publisher CNET Networks for about $20 million. Also that year the company sold Internet filtering software company NetNanny to ContentWatch.
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