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LookSmart is a search advertising company. It provides search, powered by Google Search, and pay-per-click and contextual advertising services. LookSmart also licenses and manages search ad networks as white-label products. It abides by the click measurement guidelines of the Interactive Advertising Bureau.
In November 1996, the company launched its Looksmart service. After leadership changes at Reader's Digest, the company was sold back to the founders as well as Martin Hosking, with Reader's Digest providing a $1.5 million loan and retaining a 10% equity stake. In May 1998, the company raised $2.3 million from Amwin and $6.0 million from Cox Media Group and Macquarie Group and was valued at $23.2 million. The company also relocated to San Francisco. In 1998, the company reached an agreement to provide directory and listing services for Microsoft. The deal provided the company with $30 million upfront and guaranteed payments of $5 million per year for 5 years. By 1999, the company had 500 employees. In April 1999, the company raised $59.6 million based on a post-money valuation of $430 million. On August 20, 1999, during the dot-com bubble, the company became a public company via an initial public offering, raising $92 million based on a $1 billion valuation for the company. By October 1999, the stock price would reach $30 per share, giving the company a market capitalization of $2.5 billion. The founders' 15% stake was worth $375 million. In March 2000, the stock price peaked at over $70 per share. In September 2000, the company acquired Zeal for $20 million. The founders only sold around 5% of their stock before the dot-com bubble collapsed. As a result of the dot-com bubble bursting in late 2000, the company fired 172 employees or 31% of its staff in January 2001 to cut costs. In March 2002, the company acquired WiseNut for $9.25 million in stock.
The company announced in August 2003 that Microsoft, which accounted for 70% of the company's revenues, was testing its own search tools and the stock dropped 20% in a day. On October 7, 2003, Microsoft announced that it would not renew its agreement with Looksmart and the company's stock price plunged 52% in a day. In September 2003, the company settled a lawsuit filed in 2002 by customers after the company converted thousands of websites that originally had paid a onetime submission fee into a cost-per-click payment model.
In May 2004, Thornley resigned as chairman and was replaced by Teresa Dial. Under Dial's leadership, Looksmart acquired Furl in September of 2004. Also during 2004, the company sold its Australian operations. In October 2004, David Hills was appointed CEO.
John Simonelli, the CFO of the company, would resign in June 2007. By July 2007, the company sold Grub to Wikia for $50,000. Further developments in 2007 included Hills resigning as CEO in August. and the company selling Zeal in October 2007 for $50,000.
Michael Onghai was named CEO in February of 2013. In August 2013, the company acquired Syncapse.
In March 2017, the company de-registered its common stock and suspended its public reporting obligations.
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