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Old 04-13-2002, 10:34 PM   #8

Join Date: Aug 1999
Location: Gold Coast, Queensland, Australia
Posts: 9,506

Originally posted by Headshop
It seems that LooKSmart investors think its a Great idea and we as webmasters should Shut up!
Looks like that board is dominated by daytraders/charters, though. Many of whom have probably mistaken this year's solid stock price increase for a sign that LookSmart is safe from suffering Excite's fate.

Meanwhile, Looksmart's leadership are looking at the company's balance sheet - which is remarkably unhealthy - and making drastic moves to plug the cash drain while the market remains ungenerous to tech/net concerns who come begging for additional rounds of funds.

I mean, while Net Tangible Assets doesn't tell the whole story (and I'm referring to the Nasdaq-listed company here, not the Australian Looksmart Ltd), a company that is not yet profitable, whose revenues are flat as of Dec 2001, whose assets are withering away, and whose competition now have teeth and a bloodlust for boosting their market share hardly deserves to be trading at such a premium over its NTA.

This is particularly so when nothing in its fundamentals have really changed, apart from a transient deal being struck with Yahoo! Australia.

As has been touted previously by FindWhat, Yahoo! and others, there's really only room for a few YellowPages-style players in the PPC market (niche concerns excepted), and with Overture, FindWhat and Google so embedded in the landscape at present - and possessing the marketing muscle to stay there - it's hard to imagine LookSmart coming away a victor.

They do still have a solid presence in Australia though, which suggests that a possible acquisition by Yahoo! could be on the horizon if their new deal is successful, but apart from that, they really have no excuse for giving their smaller advertising partners the short end of the stick, which seems to have occurred here given the $0.15/click minimum expense. (whereas Overture's arrogance could arguably be forgiven)

BTW, is anyone familiar with MSN's stance on pay-for-performance search? We've all heard Yahoo! express their intent to launch their own pay-for-performance supplement at some stage, but MSN seems to have sat quietly on the sidelines while supporting Overture, Looksmart and others during the past couple of years. If they decide to dump Looksmart, the company would have little to no chance of survival, IMHO.

Disclaimer: I am not a broker, licensed securities dealer, financial advisor or similar. In fact, I know bugger all about anything, so take my comments with a grain of salt and don't sue me if you make an ill-informed investment decision based on the above spiel.

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