Looksmart falls 40% in Early Trading

Stock takes a dive

[herb]

After Mondays Market close LS said it would forgo near-term earnings in order to beef up its search product.

story [marketwatch.com]

[Bobby_Davro]

At $33.4M per quarter, that is 55.7M clicks per month. Anyone know what percentage of that is through MSN?

I am not sure what this means:
"while distribution costs remain between 53 and 55 percent of total sales. "
Does that number include the affiliate split that goes to MSN? Seems a little low to me.

[NFFC]

>Seems a little low to me.

In addition MS also pay a fee to use the data. I would imagine the split seems a little low to MS too.

Distribution costs as a percentage of revenue, which includes costs for both advertising and listing distribution, remained constant at 39% in both 2001 and 2002. Distribution costs in the fourth quarter of 2002 were 53%. We expect distribution costs as a percent of revenue to increase gradually as our listings revenues increase and higher contractual revenue sharing obligations with Microsoft apply. We expect further increases if we enter into agreements with additional significant distribution partners.

sec.gov [sec.gov]

[Bobby_Davro]

MSN pay a fee? How on earth have LS got away with that?

If MSN have a 63% share from Overture, it seems very strange that they have negotiated such a poor deal from LS. They might be better off just buying LS outright.