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Is LookSmart Making a Comeback?

Revenue up 24%. LookSmart Reports Earnings.

     
10:11 pm on Feb 15, 2007 (gmt 0)

10+ Year Member



This is interesting. They are getting more clicks and
gross margins are way up. I thought this engine was on its
way down?

[biz.yahoo.com...]

Total paid clicks increased to 105 million for the fourth quarter of 2006 compared to 72 million for the fourth quarter of 2005, an increase of 45%, and a 4% increase from 100 million in the third quarter of 2006.

Total monthly unique visitors to the Company's network of owned sites were 13.5 million at the end of the fourth quarter of 2006 compared to 9.0 million at the end of 2005 and 14.5 million at the end of the third quarter of 2006. The Company hit a new high of 17.6 million in November prior to an expected seasonal slowdown. As part of LookSmart's ongoing optimization efforts on its consumer sites, audience is expected to fluctuate month-to-month but increase over time.

1:46 am on Feb 16, 2007 (gmt 0)

WebmasterWorld Senior Member quadrille is a WebmasterWorld Top Contributor of All Time 10+ Year Member



2006 was a critical year; one in which we realigned our business strategy to become more relevant with advertisers and publishers, while growing and monetizing our consumer audience.

That's the clue; the company is doing OK, by focussing on its 'social networking' sites. Ok - but nothing compared to myspace etc., and there's no certainty of doing better - they may get squeezed out of a competitive sector.

As for search ... don't go there ;)

Basically, they've lived to fight another day, as the market has warmed to a couple of sites they bought a year or two ago. Not much evidence of innovation, though.

My bet is a takeover, probably Yahoo!, within 12 months.

NOTE: I have no insider or any other knowledge of their activities, and this note does NOT constitute investment advice in any way, shape or form ... cheez, I could be WRONG :)

8:35 pm on Feb 24, 2007 (gmt 0)

5+ Year Member



the Q4 result is much worse then the headline numbers .

as Quadrille has mentined lets not even talk about their search results but we can identify clear risks for the Looksmart model in both i believe.

Looksmart has guided for a lower Q1 result then Q4 with limited upside in revenue terms for FY 2007

This in part goes to its recent resigning of ASK on worse financial terms but in reality deals more with the Looksmart model.

Looksmart will still report more losses quarter over quarter in Fy 2007 as they are spending more money on capex (which was not spent in recent years) and higher operating expenses.All this against a background of higher TAC costs with perhaps the only bright light of higher gross margins from their own traffic.

I believe LOOK has erred in its vertical strategy and is focussing on "licensing" deals to gain traffic as opposed to spending money on Wisenut and actually delivering better results and earning revenues through its own site.

Looksmart still has too many problems both short and medium term in areas of technology and execution of its business plan.

In short Looksmart is on life support and i see no upside whilst in its current form and even less likely as being a takeover potential.

 

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