Looksmart looking to cut costs

[Shak]

LOOKSMART'S Australian operations and the fate of its 45 local employees will be under the microscope over the next month as its global chieftains seek a way to survive a body blow dealt to the company by Microsoft.

[australianit.news.com.au...]

Shak

[Namaste]

goodbye!

[Nick_W]

so long, and thanks for all the fish....

Nick

[NFFC]

I think those of us rejoicing in Looksmart's demise should take a little time out to think of the employees.

I'm sure there are some good people going to be out of work, sometimes that can have a huge effect on partners, children etc.

[Nick_W]

No rejoicing here.

It's a big blow. I'd have liked to see them come back from the brink and compete effectively. We certainly need some competition....

Nick

[Shak]

NFFC,

not ur usual 1 liner, but spot on.

I say all the best to them for the future.

Shak

[Brad]

>>I'd have liked to see them come back from the brink and compete effectively. We certainly need some competition....

It is sad for the employees. However, the competition in the PPC industry will not come from Looksmart. I don't think many would trust them ever again, even under completely different management. Damaged goods by their own hand.

[webdiversity]

If you had $60 million in the bank would that be the demise?

Looksmart still have Inktomi and cash. With all that is going on with MSN, and Yahoo and Overture and Google, a phoenix may yet rise from the flames.

NFFC is spot on once again, there are always people at a sensible level who do suffer at the hands of big corporate decisions.

MSN have got some work to do to bring a decent product of their own to market.

[woop01]

I think a lot of us here have paid for those employees to have a job just a few days longer in exchange for an absolutely pathetic ROI from bogus clicks.

[JeremyL]

While I want no one to be out of work that is not really something of concern to most of us. I tried to think of another way to word that statement but anything else would have been just beating around the bush. I know it sounds harsh but as buisness people we all know the reality. It's nothing personal but we all want what is best for our buisness and having consumers use less search engines so I only have to pay to be included in a small few is good for buisness to me. Google needs competition but in a pure SE way, not what Looksmart was doing. Even consumers make the choice to put people out of work everyday but think nothing of it. How many people lose thier jobs because Walmart comes in and takes all the buisness in a town because consumers go where they can get the cheapest prices. In an economy like ours only the strong survive. Looksmart isn't going to be one of them. Is it sad that people will lose jobs over it? Yes, but I guess I think as much about that as I think about the mom and pop hardware store that went out of biz when Home Depot moved in.

[bigjohnt]

I'm going to miss LS, as will some of my clients. under the .15 per click model, several clients made a bunch of money with LS's help.

Change is the only constant, and once again, life never gets boring in internet marketing.

Every change like this makes professional SEO/SEM's more valuable.

[dvduval]

I will say a prayer for the employees, but...

LookSmart, you had it coming. Judging by the way you handled me and others, I think it's karma.

[bobothecat]

I certainly can't see LookSmart making it on its own... not without a buy-out ( perhaps it's the next victim to Yahoo ).

In regards to still having Inktomi and cash ... what LookSmart lacks is Webmaster respect, support and / or confidence... which would likely mean 'less cash' coming in for the future. Who's going to want to 'advertise' when there's no major partner?

I feel for the employees... but also think they had to see the 'writing on the wall'.

Oh well...

Peter

[Bobby_Davro]

What is there to buy in the buy-out?

Now, if they could just revive Wisenut... They already have some standing in the SE world and they already have their own PPC model. If they can combine those with a working search engine then they can compete with the big three.

[max_rk]

sad to see LS go down.

[Chris_D]

Looksmart still have Inktomi and cash

No - looksmart have Zeal, Wisenut and cash. Yahoo have Inktomi.

Yes - sad for the employees, as it always is in this situation. And I hope those employees remember the management team members who made the dumb choices - which alienated the webmasters of the world....

[NFFC]

Don't think I'm going soft in my old age ;)

Some very good people have lost out, hard workers who gave their all.

Others... well see [finance.yahoo.com...]

[kingarthur]

LookSmart has been one of the few models that have worked for me. I have received nothing but top notch service from each and every person I have worked with. I bought banner ads from them in 1998 and have had the same account rep since 2000. Some of you may not like their pay per click model, but I for one can appreciate their model. I can figure out exactly how much I need to pay in order to launch a new campaign. I really dont understand how many of the people in this forum believe that they deserve free traffic from any search engine. Without some form of human editing the internet will always be inundated with spam results.
I wish all the people at L$ the best and hope that someone will come in and bail them out.

[rcjordan]

>I think those of us rejoicing in Looksmart's demise should take a little time out to think of the employees.

Uhh, NF, ****-****!

[Bobby_Davro]

kingArthur, the problem was never about them using PPC - most people here love that business model. The problem is with them taking people's money for a directory listing and then switching to a completely different model which is useless for many of those of us who paid for the directory.

And the courts agree.

Does anyone know how much that court ruling is going to cost them? Is it going to eat into their $60M cash reserve?

[pchristensen]

Nobody wants to see innocent people loosing their jobs. But LookSmart certainly had it coming to them. For months I have been alleging "click fraud" on the part of LookSmart. I have no actual evidence to support that they are directly involved in it, but they have absolutely no concern with the potential for "over-clicks." And when the company is in dire straights, I am sure they want every dime they can possibly get.

Just this past weekend I re-started my LookSmart ad campaign thinking that perhaps my previous experiences were not typical of the average user. In my e-mail this morning was a notice that my budget had reached its limit. What? After just two days and absolutely zero sales from those clicks? There is absolutely no way that my budget could have hit nearly 1,000 clicks in just two days when on Overture, I can go months and not reach the budget limit.

Something is wrong with Looksmart: either they are a part of the click fraud problem or they acknowledge its existence and refuse to build-in adaquate protection algorithms to guard against it. Either way, they are a bad company with zero ethics to allow it to continue.

Back during my first bad experience, I demanded to see a report of all IP addresses clicking to my site. Answer? "No way...it's against our company policy." Fine. LookSmart and its policies can die a painful death: they deserve it. I only hope that their workers can find alternative employment before the entire company implodes.

[powerstar]

>>>the problem was never about them using PPC - most people here love that business model. The problem is with them taking people's money for a directory listing and then switching to a completely different model which is useless for many of those of us who paid for the directory.>>>

And why is it useless? becasue now you have to pay for the traffic.

If they kept the $299 and you get free traffic forever from MSN then everybody here will still like Looksmart almost as much as Google...but then Google is free so...then Google is better

Yahoo switch from $299 forever to $299 a year and then almost removed the directory results (are you getting the same traffic from your $299 submit as before?). Business is changing all the time. By moving to the new model they now have 60 mill. in the bank...if they kept the $299 forever then they will be out of business on Jan. 15th 2004

[woop01]

There is absolutely no way that my budget could have hit nearly 1,000 clicks in just two days when on Overture, I can go months and not reach the budget limit.

That's just about the exact same thing that happened with my sites. When I can get a 110% ROI on Adwords and 104% ROI on Overture for keywords that I get 10% ROI on Looksmart there is something wrong. When keywords that eat up the same amount of clicks on Overture and Adwords combined for one month in just three days on Looksmart, something is wrong. Of course, I'm preaching to the choir on this.

Until one of these employees I'm supposed to feel sorry for comes out and blows the whistle on what is actually going on with Looksmart, I won't feel sorry for them.

[Bobby_Davro]

"if they kept the $299 forever then they will be out of business on Jan. 15th 2004"

Then they shouldn't have offered it in the first place. A lifetime listing is a lifetime listing.

"And why is it useless? becasue now you have to pay for the traffic."

No, we had *already* paid for the traffic. They just wanted a second helping. Imagine buying a car for $5K and then being told afterwards that you have to pay a $10 fee every time you want to drive the car, but you do get 10 free rides in the car each month. Would you be happy with that?

What's more, for many webmasters $0.15 was far more than they could afford to pay per click. Many people had banked on paying a one off fee of $299 and getting many clicks over a long period of time. PPC pricing only suits a certain set of webmasters.

If they had started a PPC engine in *addition* to the directory, it wouldn't have been a problem. But they screwed a whole bunch of webmasters and "upgraded" their listings to PPC accounts.

Nor do I agree that they would be out of business. Where is the evidence for that? Yahoo runs a directory, charging an identical amount, and they don't seem to be going out of business at the moment.

[powerstar]

>>Yahoo runs a directory, charging an identical amount, and they don't seem to be going out of business at the moment.

and where is the directory results? I paid many $299 to be listed on Yahoo and used to get alot of results and I get nothing or very close to nothing right now. Looksmart was never profitable untill this year. Where is Yahoo making their money..(PPC maybe) not from the $299 that you paid about 5 years ago

>>>What's more, for many webmasters $0.15 was far more than they could afford to pay per click. Many people had banked on paying a one off fee of $299 and getting many clicks over a long period of time. PPC pricing only suits a certain set of webmasters.

If you can't effort to pay for the traffic...you are not going to be in business anyway so what's the point. Plus you recieved planty of traffic for your $299 and where can you find traffic for $0.15 a click? I'll bet you we will have to pay much more for this traffic on MSN in the future.

Changing world and always changing business model..if you are in a business for yourself you know that

>>Imagine buying a car for $5K and then being told afterwards that you have to pay a $10 fee every time you want to drive the car, but you do get 10 free rides in the car each month. Would you be happy with that?

But we are making money with this traffic (i know i am) so they asked you to share a bit of your profits. I know it's better to get it for free but still...

[theposter]

We did work with LookSmart USA for a while and though we did have MAJOR problems with click acounting and costing from their end, in the end it did work out. Lots has been said about thier lack of professionalism, however, i do know that a lot many good professionals do work there. It will be sad to see LookSmarts demise, if it were to happen.

However their USP was their MSN traffic, without that, i doubt they have much of a chance of surviving. sad.

[skibum]

It sucks to get laid off, but at least it provides a chance to ski when the pink slip comes in January in the US. ;)

Virtually all dealings with them were poorly handled and many customer service issues ignored. Repeatedly. Their model has worked for a select few clients and it'll be a loss for them if LS gets no new distribution deals. If they are like so many other comapnies, a nice chunk of that 60M will go for the golden parachutes to the top brass in exchange for sticking around till the end.

Those who had to deal with the issues caused by business model changes will probably be happier elsewhere.

[mundonet]

Why sad? It's the best news on the web! $.15 for untargetted and unaccounted clicks? For outdated titles & descriptions? For irrelevant top page results in M$N? For Inktomi using the old bad listing they made for us instead of fresh on page text / description as Google does? I sure hope that Inktomi dumps ASAP the L$ directory content contaminating their results.

[amhurst]

"The problem is with them taking people's money for a directory listing and then switching to a completely different model which is useless for many of those of us who paid for the directory"

We should distinguish between LS in the US and the rest of the world. LS in the UK and other markets around the world never went down the US route. They still offer one off payment products as well as CPC products.

[edited by: amhurst at 8:32 am (utc) on Oct. 14, 2003]

[Namaste]

it's not so bad for the employees. OZ is in good shape and these people will face a few months of temporary unemployment at most. In anycase they were probably not making much of an impact, so it was a case of disguised unemployment.