SEL: Outlook for Looksmart

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Search marketing in the new media era.

August 15, 2003

Outlook for Looksmart

Things are not looking too good for LookSmart's partnership with MSN

Microsoft "conducted a test on a small percentage of searches on its web site in the United Kingdom that eliminated the directory layer of search results in which our listings currently appear. Microsoft has indicated that it will expand this test across all searches on its web site in the United Kingdom starting as early as September 2003. The change would significantly reduce the paid clicks we receive in that geographic market during the remainder of the term of the agreement unless Microsoft elects to adopt another of our listings products... Microsoft has also indicated that it intends to conduct a similar test on a small percentage of searches on its web site in the United States starting in October 2003... Depending on the results of these tests, Microsoft may remove the directory layer in its current form from its web site in the United States at the expiration of the agreement." For the 3 months ended June 30, LOOK derived 65% of its revenues from its relationship with Microsoft. LOOK's agreement with Microsoft expires on December 3, 2003. It is thought that MSN could still renew its agreement with LOOK, but that the relationship could be diminished.
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Andy Beal | permalink | +marktd |

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