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Quote from above article
"Looksmart (NASDAQ:LOOK) plunged after the company reported in an SEC filing that Microsoft (NASDAQ:MSFT) is beta testing a search engine that doesn't include Looksmart results. The news dampened speculation that MSN may acquire Looksmart."
MSN would be smart to dump LS, from what I can see. I just wonder if they intend to bring PPC completely in-house.
Do you think a search engine can perform well without a directory support. We have 3 major engines: Google, Yahoo, and MSN (all 3 have been using directory now).
If using a directory is very importance for relevancy, perhaps MSN is playing this trump so that Looksmart's shares go very down and then they can buy the company for a low price.
"Shares of LookSmart shed 79 cents, or 21%, to $3.01 on Nasdaq. The company said Microsoft's MSN has been testing various options on its United Kingdom search page to determine the impact of eliminating or replacing most of the company's directory listings supplied by LookSmart.
In a note Friday, US Bancorp Piper Jaffray analyst Safa Rashtchy said that he believes MSN will renew its agreement with LookSmart "but the major unknown factors are the level of implementation of the company's listings on MSN's page, which could determine the total revenue generated for LookSmart, and the revenue-share agreement.""
joined:Apr 13, 2002
The other thing they are testing, according to the news item, is MSN results with a LS backfill, presumably to fill in holes or enhance the results.
I have often stated here that LS is the ideal match for MSN and I believe those cards are still in the deck, with a strong potentiality for getting dealt and played.
If you HAVE to pay, then your site is probably a lower quality site, compared to the rest of the sites out there.
Pay-for-inclusion engines always seem to show inferior results and I'm surprised that MSN has kept LS this long.
I hope MSN takes the Google approach with their new engine, FREE crawling of the whole web (or as much as they can chew). Google has proven that that is the model that works.
The pay-for-inclusion engines have all had problems and ending up in trouble financially. The reason is simple. Their results are inferior.
"The test results "will affect Microsoft's decision to renew the distribution agreement, and whether to continue to distribute some or all of our paid listings after the agreement expires," said LookSmart. The company added, "Based on our discussions with Microsoft, it is likely that the licensing portion of the agreement will be renewed, but that it will result in less licensing revenue than under the current agreement."
So If we can't make any money let's give it for FREE. Make sense. The only reason MSN will drop LS is if they think they can make more somewhere else or with a different approach.
But then again maybe they should take Worker advise and drop Overtur, LookSmart and Inktomi where they are making money form and implement a Free crawl engine. Sounds good to me, I would like that.
joined:July 21, 2000
Because it makes the person who has paid a lot of money in return perhaps?
Just a thought ;)
The LookSmart US results have been out of MSN UK for about 2 months now (incidently).
...make its in-house PPC model (like Adwords)
I've been wondering about that. With Overture already suing Google and FindWhat, that move would probably generate yet another PPC lawsuit (just my guess) -- but there certainly is money to be made in PPC, so that alone would not be a deterrent for MS.
Has anyone heard or seen any indications about a MS PPC program that are more than speculation?
However, if MSN gains more traffic with more relevant SERPs, then MSN may make more from their cut of the increased Overture clicks which average about 40 cents.
Let's face it, the big money is being made in pay per click. Why mess around with LS's failing business model when PPC is booming?
The company may be about to learn the risk of getting into bed with an elephant - it's okay until they roll over and squish you.
The company disclosed in its quarterly report late Thursday that Microsoft intends to test a version of MSN without LookSmart in Europe and the US, and may decide not to renew its contract with the company if the new format works.
LookSmart said: "The test results will affect Microsoft's decision to renew the distribution agreement, and whether to continue to distribute some or all of our paid listings after the agreement expires."
I think MSN will make a Google-like model. It will crawl the entire net with its own MSNbot, use LookSmart directory for relevancy (just like Google uses DMOZ), dump Overture, and make its in-house PPC model (like Adwords).
That sounds good to me. I don't think pure PFI makes too many people happy.
I believe that the search engines should make their money by providing a good product that companies will pay to use.
They should not make their money off of webmasters and site owners. If they can not provide a competitive SE service they should get out of the business instead of trying to sucker people.
Concerning an earlier post in this thread about a relationship between looksmart and amazon...
I have noticed two editors at looksmart who are also editors at amazon. I wonder how many more there may be.
joined:July 21, 2000
About 50 million unique users hit MSN with search queries each month, Payne said.
Separately, Payne said MSN is sticking with paid-inclusion partner LookSmart Ltd. (NASDAQ:LOOK), which allows Web site operators to pay to have more of their pages included in Internet searches.
Seems like they are going to stick with LOOKSmart.
And to all those people who keep saying (over and over & over)that looksmart is a failing business model, think about this:
1. Lycos just signed up with them.
2. Net Income Increases to $1.2 Million: Under GAAP, LookSmart's net income was $1.2 million or $0.01 per diluted share for the quarter ending june 30th.
3. Revenue Grows 83%: LookSmart reported second quarter 2003 revenue of $38.4 million, representing an 83% increase from the second quarter 2002
4. Why is google PPC so much better than looksmart as people dont seem to mind adwords charging ppc? But looksmart charging ppc is bad?
5. MSN is making millions off of looksmart. I (in my opinion) dont think their just gonna get rid of that income.
6. If yall havent noticed looksmarts "wisenut.com" is looking much better and MSN really needs a back fill engine, I really dont think MSN will beable to make their own engine any time soon. It aint that easy!
7. If intkomi sold for 250 million whats wisnut+Look worth?
joined:Apr 13, 2002
looksmarts "wisenut.com" is looking much better...
First, let me say that I happen to like LS. They come in handy and have a terrific community in Zeal.
However, I have to disagree with the above statement because it simply is not true.
Wisenut hasn't been updated for months. I heard it straight from Looksmart yesterday at the SES.
Additionally, they promised (Just as they had at the March SES) to start a new regular update, on a 45 day refresh schedule (back in March they were promising an imminent 30 day refresh schedule).
If it was me at MSN, I'd announced to the world I was testing without LS and keep announcing it. Watch the LS share value drop through the floor and then pick it up for a bargain.
Doug, are you from MSN ;) Actually I think the same. LS would go very down and MSN would buy it off.
How many people here still refuse to pay more money beyond their "free" allocation?