LookSmart
Encyclopedia
LookSmart is an online advertising company based in San Francisco. LookSmart provides search advertising products and services to text advertisers, as well as targeted pay-per-click search and contextual advertising via its Search Advertising Network. For publishers seeking to create their own branded vertical advertising networks, LookSmart also licenses and manages search ad networks using its AdCenter platform. LookSmart is one of the five founding members of the IAB Click Measurement Panel.
was founded in Melbourne
Australia in late 1995 (it was originally called Homebase) and was majority-owned by Reader's Digest
, who had aspirations to develop a female- and family-friendly portal to supplement their legacy magazine business. After leadership and strategy changes at Reader's Digest, the company was bought back by founders Evan Thornley
and Tracy Ellery, along with Martin Hosking
. During 1997, the company sought venture capital
funding, and on several occasions came close to the financial brink. Venture capital funding from Australian and US sources was obtained in 1997 and 1998, and the company relocated its head office to San Francisco.
, signed in 1998, to provide directory and listing services. In 1998-2001, LookSmart was a proud sponsor of Sesame Street
.
. Their stock debuted at US$12 per share, and reached a high in excess of US$70 in early 2000. Australian venture capital investors such as the CHAMP group (via their fund Australian Mezzanine Investments) made very strong gains on their pre-IPO investment.
Evan Thornley and Tracey Ellery had sold stock after the expiration of the "lock-up" on company officers after the IPO, but suspended their stock sale program in 2000 once the stock price went below the IPO price of US$12. They resumed their stock sale program in 2004.
In mid 2002 Evan Thornley announced his intention to return to Australia and resigned as Chief Executive and Peter Tomassi, the company's Chief Product Officer to accept a fellowship a Columbia University. At the time, there was division on the Board over the process to appoint a new CEO and as a result 3 directors resigned from the Board in 2002, and new directors were appointed.
In 2002, LookSmart also changed its previous "submit a site" model where businesses could pay a fee to have their site listed in the LookSmart directory, and adopted a pay-per-click model. This led directly to a class-action lawsuit, which was settled in September 2003 by LookSmart offering free clicks to businesses whose websites had been listed under the previous system.
A number of internet companies, including LookSmart, were affected by state and federal government action in the United States against internet gambling sites. All major search engines were involved in an inquiry by the US Attorney-General, and subsequently LookSmart and all other major search engines agreed to cease accepting text advertisements from internet gambling companies.
Furl
, founded by Mike Giles in 2002, was purchased by LookSmart in September 2004 http://searchenginewatch.com/showPage.html?page=3411601.
Evan Thornley stood down as Chairman in May 2004 and was replaced by Teresa Dial, a former CEO of Wells Fargo. In May 2005 Evan Thornley and Tracey Ellery announced that they would not stand for re-election to the Board of Directors at the conclusion of their terms in June 2005.
A new US-based CEO, David Hills, was appointed in October 2004, and added several new executives and attempted to diversify LookSmart's revenue streams while still continuing to post losses similar to those from the Thornley era.
LookSmart acquired volunteer-built directory Zeal
in October 2000, and closed Zeal
on 28 March 2006.
In June 2007, John Simonelli, the chief financial officer, announced his intention to resign upon the appointment of a replacement.
In July 2007, LookSmart sold the Grub search crawler
to Wikia, Inc.. for $50,000.
Some of the building that houses Looksmart was leased to MySpace
in late 2007. The LookSmart sign outside the office was removed in December 2007 and replaced with a new one.
Inception
LookSmart es una basurawas founded in Melbourne
Melbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
Australia in late 1995 (it was originally called Homebase) and was majority-owned by Reader's Digest
Reader's Digest
Reader's Digest is a general interest family magazine, published ten times annually. Formerly based in Chappaqua, New York, its headquarters is now in New York City. It was founded in 1922, by DeWitt Wallace and Lila Bell Wallace...
, who had aspirations to develop a female- and family-friendly portal to supplement their legacy magazine business. After leadership and strategy changes at Reader's Digest, the company was bought back by founders Evan Thornley
Evan Thornley
Evan William Thornley , former Australian politician and entrepreneur, was a Labor member of the Victorian Legislative Council for the Southern Metropolitan Region...
and Tracy Ellery, along with Martin Hosking
Martin Hosking
Martin Hosking was born in 1960 and lives in the Dandenongs, Australia. He is a co-founder of RedBubble and former chairman of Aconex. He has lectured at the Melbourne Business School and been recognized as one of Australia's leading Web 2.0 Entrepreneurs....
. During 1997, the company sought venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
funding, and on several occasions came close to the financial brink. Venture capital funding from Australian and US sources was obtained in 1997 and 1998, and the company relocated its head office to San Francisco.
Deal with Microsoft
Recognizing the difficulty of building a consumer-oriented brand, LookSmart built a new strategy around licensing its search directory to a wide range of portals and internet sites. A significant amount of Looksmart's revenue stemmed from a lucrative licensing deal with MicrosoftMicrosoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, signed in 1998, to provide directory and listing services. In 1998-2001, LookSmart was a proud sponsor of Sesame Street
Sesame Street
Sesame Street has undergone significant changes in its history. According to writer Michael Davis, by the mid-1970s the show had become "an American institution". The cast and crew expanded during this time, including the hiring of women in the crew and additional minorities in the cast. The...
.
Initial Public Offering
LookSmart went public in August 1999, as part of the widespread technology boom in Silicon ValleySilicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
. Their stock debuted at US$12 per share, and reached a high in excess of US$70 in early 2000. Australian venture capital investors such as the CHAMP group (via their fund Australian Mezzanine Investments) made very strong gains on their pre-IPO investment.
The Decline of the Online Advertising Market
The company was hit by the "tech wreck" in 2000. As with the rest of the industry, LookSmart lost a significant number of major advertising customers who went bankrupt in 2000, and was forced to reduce expenditure and lay off a large number of staff in early 2001 to survive.Evan Thornley and Tracey Ellery had sold stock after the expiration of the "lock-up" on company officers after the IPO, but suspended their stock sale program in 2000 once the stock price went below the IPO price of US$12. They resumed their stock sale program in 2004.
The Later Years with Microsoft (2001 - 2003)
After major cost reductions in early 2001, the company chose to focus on its relationship with Microsoft, and in particular, the development of a paid listings business. LookSmart's listings and licensing business, both dominated by a contract with Microsoft, quickly became its major source of revenue. In 2002, the company became profitable.In mid 2002 Evan Thornley announced his intention to return to Australia and resigned as Chief Executive and Peter Tomassi, the company's Chief Product Officer to accept a fellowship a Columbia University. At the time, there was division on the Board over the process to appoint a new CEO and as a result 3 directors resigned from the Board in 2002, and new directors were appointed.
In 2002, LookSmart also changed its previous "submit a site" model where businesses could pay a fee to have their site listed in the LookSmart directory, and adopted a pay-per-click model. This led directly to a class-action lawsuit, which was settled in September 2003 by LookSmart offering free clicks to businesses whose websites had been listed under the previous system.
A number of internet companies, including LookSmart, were affected by state and federal government action in the United States against internet gambling sites. All major search engines were involved in an inquiry by the US Attorney-General, and subsequently LookSmart and all other major search engines agreed to cease accepting text advertisements from internet gambling companies.
After Microsoft
In late 2003, Microsoft announced that it would not renew its contract with LookSmart, which at the time accounted for over 70% of LookSmart's revenue. As a result of the company's dependence on this revenue, large-scale sackings and redundancies occurred, including the closure of all non-US operations, all of which were unprofitable.Furl
Furl
Furl was a free social bookmarking website that allowed members to store searchable copies of webpages and share them with others. Every member received 5 gigabytes of storage space. The site was founded by Mike Giles in 2003 and purchased by LookSmart in 2004...
, founded by Mike Giles in 2002, was purchased by LookSmart in September 2004 http://searchenginewatch.com/showPage.html?page=3411601.
Evan Thornley stood down as Chairman in May 2004 and was replaced by Teresa Dial, a former CEO of Wells Fargo. In May 2005 Evan Thornley and Tracey Ellery announced that they would not stand for re-election to the Board of Directors at the conclusion of their terms in June 2005.
A new US-based CEO, David Hills, was appointed in October 2004, and added several new executives and attempted to diversify LookSmart's revenue streams while still continuing to post losses similar to those from the Thornley era.
LookSmart acquired volunteer-built directory Zeal
Zeal (web)
Zeal was a volunteer-built web directory, first appearing in 1999, and then acquired by LookSmart in October 2000 for $20 million. Zeal combined the work of Looksmart's paid editors with that of volunteers who profiled websites and placed them in a hierarchy of subcategories...
in October 2000, and closed Zeal
Zeal (web)
Zeal was a volunteer-built web directory, first appearing in 1999, and then acquired by LookSmart in October 2000 for $20 million. Zeal combined the work of Looksmart's paid editors with that of volunteers who profiled websites and placed them in a hierarchy of subcategories...
on 28 March 2006.
In June 2007, John Simonelli, the chief financial officer, announced his intention to resign upon the appointment of a replacement.
In July 2007, LookSmart sold the Grub search crawler
Grub (search engine)
Grub is an open source distributed search crawler platform.Users of Grub can download the peer-to-peer grubclient software and let it run during computer idle time. The client indexes the URLs and send them back to the main grub server in a highly compressed form...
to Wikia, Inc.. for $50,000.
Denouement
On July 26, 2007, CEO David Hills resigned. The company said that he left to start his own business. Board Chairman Ted West assumed interim CEO duties.Some of the building that houses Looksmart was leased to MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
in late 2007. The LookSmart sign outside the office was removed in December 2007 and replaced with a new one.