Looksmart Consumer Alert!

[Edwin]

Be aware that Looksmart has changed ALL commercially-submitted listings (i.e. listings where you had to pay to be listed in their directory) over to their new Small Business program.

They call it an upgrade. I call it several very unprintable things that have no place in a family-friendly forum!

How it works is this: you receive $300 in "free" click credits ($15 a month for 20 months) as compensation for losing your listing.

Each click-through on your listing costs $0.15. So in other words, you're getting 100 clicks a month "free".

What happens after the 100 clicks are used up? Well, one of two things:

A) If you're willing to pay for more clicks, you can continue to get traffic at $0.15 per click.
B) If you're NOT willing to pay for more clicks, YOUR LISTING IS NO LONGER DISPLAYED THAT MONTH!

You have to log into your Looksmart account and "activate" your listing before July 11, 2002. Activation consists of agreeing to their new terms of service and submitting full credit card and billing details!

If you do not "activate" your account (by submitting said credit card details) then your listing will be removed permanently from LookSmart after July 11, and you will have to pay $49 to relist your site PLUS $0.15 per click afterwards

So, are they wrong? Ethically, morally and everything-else-ly, yes! Legally, most likely not since their Terms of Service basically say [paraphrased]: "We can do whatever we like, whenever we like"

I feel most sorry for the people who paid $199 for Express inclusion just a few days ago, only to find the rug pulled from under their feet as their listing is switched to this crazy per-click thing.

The most irritating, for me, is the impersonal tone of the letter announcing the change and the HUGE lengths to which LookSmart goes to PRETEND that somehow the new system is an improvement, an upgrade, a benefit, and that we're getting free traffic!

Needless to say, I will NOT be activating my listings and LookSmart will never figure in my promotion plans from this day forward.

[Nintendo]

You can EASILY get listed in Looksmart for FREE at Zeal.com. Just become an editor there and your link is added just days after submiting it. It just can't be in a business category.

[brian 2468]

Edwin........Ninetendo is right........thanks to zeal.com......my little site comes up on MSN, LOOKSMART..and a few more.......all my hits so far come from there.......As long as its not in the Business section.......its fine.......

which site you want submitted

[Edwin]

Zeal is not the issue here. I'm not looking to list a NEW site. I'm angry because I paid the one-off listing fee back when it was a one-time-only fee, and now they're switching it into a "better" deal which will actually only bring me 2,000 visitors maximum, spread over 20 months.

You can bet that as soon as they notice a massive increase in submissions via Zeal, somebody in Corporate will start making noises to curb or do away with Zeal-originated listings. Just my opinion, of course!

[brian 2468]

I agree with you regarding your listing, that is bad business ethics, trouble is these business corps do not seem accountable to anyone.

[sdarken]

Well said Edwin.

I could completely understand if they had introduced these terms to new listings but to do this to existing listings is just plain wrong.

It is my prediction that Looksmart is going to lose a huge percentage of commercial listings. It wouldn't surprise me in the slightest if they reverse or modify this plan when they see how few companies decide to pay up.

If they do decide to go ahead, a few companies may end up with a great opportunity to be the only listing in their category. I wouldn't want to reward Looksmart (by paying them) for their nasty behaviour but their loss may be a gain to some companies.

- Simon

[Headshop]

It seems that LooKSmart investors think its a Great idea and we as webmasters should just go along with it!
http://messages.yahoo.com/?action=q&board=LOOK

[Czar]

Originally posted by Headshop
It seems that LooKSmart investors think its a Great idea and we as webmasters should Shut up!
http://messages.yahoo.com/?action=q&board=LOOK

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.

[Jack]

Personally, my submission for one of my new sites was approved 2 days before I received this E-Mail. I haven't decided what to do yet come July 11, but this certainly does make me steamed.

[dayshumor]

Edwin, I totally agree with you. I was fuming when I got the email...I had JUST submitted in February and was listed just 2 weeks before the dreaded letter came. This really stinks considering I had achived a #1 rank for my most wanted keyword phrase. I agree and think it's even more irritating that they act like this is a PLUS.

"We are automatically upgrading you because we consider you a valued customer." What the......

[PlanetLaunch]

LookSmart is history.

This is the desperate act of a dying company.

At 0.15 per click, their commercial directory will soon be left with just the high dollar/ high margin services such as financial services, gambling, web hosting, etc - you know the ones with the high bids on Overture.

They can't compete with Yahoo's directory or DMOZ in the directory arena and they can't compete with Google or Overture or Findwhat in the Pay Per Play arena.

Looksmart should team up with Sprinks and Altavista to produce the most irrelevant, spam-happy search engine results ever. The chance for survival of any of these three services is bleak to say the least.

[Edwin]

Originally posted by PlanetLaunch
Looksmart should team up with Sprinks and Altavista to produce the most irrelevant, spam-happy search engine results ever. The chance for survival of any of these three services is bleak to say the least.

Actually, I'm not so sure about this. When all you do is pumb pay-per-click queries, how many people do you REALLY need to run the company?

They may not be the large (ok, severely bloated!) organizations they are now, but I could see all 3 surviving as lean and very mean companies with a dozen or so employees each.

Will this happen? Probably not - many companies seem prefer to commit corporate suicide rather than accept that a company with 10 people making a nice profit is (by many measures) better than a company with 200 people hemorraging money all over the carpet.

I am thinking of the example of Excite... It must be IMPOSSIBLE for them to be making a loss now given that the entire company was bought for just $10 million - they have hundreds and hundreds of thousands of incoming links that will go on driving millions of (free) visits a month for years to come.

[Edwin]

Originally posted by Edwin


Actually, I'm not so sure about this. When all you do is pump pay-per-click queries, how many people do you REALLY need to run the company?

They may not be the large (ok, severely bloated!) organizations they are now, but I could see all 3 surviving as lean and very mean companies with a dozen or so employees each.

Will this happen? Probably not - many companies seem prefer to commit corporate suicide rather than accept that a company with 10 people making a nice profit is (by many measures) better than a company with 200 people hemorraging money all over the carpet.

I am thinking of the example of Excite... It must be IMPOSSIBLE for them to be making a loss now given that the entire company was bought for just $10 million - they have many hundreds of thousands of incoming links that will go on driving (at zero cost to Excite) millions of visits a month for years to come.

[Edwin]

How embarassing! I pushed "Quote" instead of "Edit" - sorry 'bout the not-quite-a-double-post, folks!

[Hope]

Zeal is great for non commercial sites, but my site is commercial. So if I want to be listed in LS, I have to pay $0.15/click. That is outragous. The main reason to be listed in LS is the MSN results. Well, I thing I will just use Overture to get listed. At least I know that price I pay for Overture listings will get me in a few more search engines.

LS messed up big time on this. They are not going to survive. The general buzz in the SEO community is anger and frustration. Most SEO that I know will not be continuing with LS after 20 months.

Many of the sites that were listed for the "One-Time Fee of $299" are getting many more than 100 clicks per month. This means that now the website owners have to shell out literally thousands of dollars that they did not budget for.

I know that there is no way I can afford LS now. I am just starting out on my own and could hardly afford the $299 for a listing. Now it has gotten out of hand.