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  1. #1
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    Looksmart (LOOK) stock took a beating after hours ( down about 60%) on the following news.

    Press Release Source: LookSmart, Ltd.


    MSN Agreement With LookSmart to End January 15, 2004
    Monday October 6, 4:15 pm ET


    SAN FRANCISCO, Oct. 6 /PRNewswire-FirstCall/ -- LookSmart (Nasdaq: LOOK - News; ASX: LOK - News), a global leader in search, today announced that Microsoft will not renew its distribution and licensing agreement with LookSmart. LookSmart and Microsoft have agreed to extend the terms of the current agreement through January 15, 2004, after which the agreement will terminate.

    "We are very disappointed with the outcome of efforts to renew our agreement with Microsoft," said Jason Kellerman, chief executive officer of LookSmart. "Despite losing a key partner, LookSmart will maintain its focus on the search business, leveraging the first integrated paid inclusion and pay-for-placement solution for advertisers, a next generation search technology, a broad network of distribution partners, more than 30,000 advertisers and a strong financial foundation with approximately $60 million in cash. We will continue to provide search results for MSN until the conclusion of our agreement while aggressively pursuing the opportunities before us."

    LookSmart's business and financial results will be materially and adversely affected following the end of the MSN relationship. Microsoft accounted for approximately 65% of listings revenues, and all of LookSmart's licensing revenue in the second quarter of 2003. At this time, LookSmart is not revising its revenue and earnings guidance for the full year 2003, given that the MSN agreement runs through January 15, 2004.

    Conference Call Information

    LookSmart will host a conference call to discuss today's announcement at 6:00 p.m. ET (8:00 a.m. Australian ET, October 7, 2003).

    To listen to the call from the U.S., dial 1-800-218-0204; from Australia, dial 1-800-730-220. A replay of the call will be available until Wednesday, October 8, 2003 at 5:00 p.m. PT. To access the replay from the U.S., dial 1-800-405-2236 and enter passcode 555439#; from outside the U.S., dial 1-303-590-3000 and enter passcode 555439#.

    The call will also be available live by webcast on LookSmart's Investor Relations Web site at http://www.shareholder.com/looksmart/ .

    Forward-Looking Statements

    This press release contains forward-looking statements, such as references to our projected revenues and earnings in 2003, levels of investment in product development, future rates of adoption by businesses of our products and services, dividends from our investment in WiseNut technology, industry projections or other characterizations of future events or circumstances. These statements, including their underlying assumptions, are subject to risks and uncertainties and are not guarantees of future performance. Results may differ due to various factors such as the possibility that we will not maintain profitability in future quarters; that we may fail to derive sufficient revenues from new and existing products to meet our financial goals; that additional customers or distribution partners may decide to modify or terminate their relationships with us; that we may fail to achieve our customer growth rate and paid click projections because of unexpected changes in customer or user behavior or changes in our distribution network; or that we may have an unexpected increase in costs and expenses. In addition, you should read the risk factors detailed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

    The statements presented in this press release speak only as of the date of the release. Please note that we undertake no obligation to revise or update publicly any forward-looking statements for any reason.

    About LookSmart

    LookSmart is a leading provider of Internet search solutions and is the global leader in paid search inclusion. Combining award-winning technology, editorial expertise, and community-based initiatives, LookSmart provides users worldwide with highly relevant search results, while delivering targeted sales leads to online businesses. LookSmart paid inclusion and auction-based keyword search results are distributed through top portals and ISPs including Microsoft's MSN, Lycos, About.com, Road Runner, InfoSpace, CNET, Cox Interactive Media and search services such as Inktomi. LookSmart is based in San Francisco, California, with offices in New York, Los Angeles, Detroit, Montreal, London, Tokyo, Melbourne and Sydney. For more information, visit www.LookSmart.com

    NOTE: "LookSmart" is a trademark of LookSmart, Ltd., and/or its subsidiaries in the U.S. and other countries. All other trademarks mentioned are the property of their respective owners.

    CONTACT: investors, Alex Wellins, alex@blueshirtgroup.com, or Jennifer Jarman, jennifer@blueshirtgroup.com, both of The Blueshirt Group, +1-415-217-7722, for LookSmart; or Michael Prichinello of RLM Public Relations, Inc., +1-212-741-5106 x14, or michael@rlmPR.com.

  2. #2
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    Looksmart sent a similar notice to their advertisers. Interesting. What do people think MSN will do?

    I wonder if they will stay with Overture and Inktomi when those contracts end. My guess is no.

    Kip

  3. #3
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    I still think Microsoft will try to buy Google. Maybe they will add google for a year first, then make a bid? Any guesses?

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  4. #4
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    Google makes sense. There really isn't another option that I see unless they have already developed something in house that they are ready to roll out. Whatever they have decided on it's already a done deal since they are bagging Look Smart so quickly.

  5. #5
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    You are right, they didn't leave themselves a whole lot of time, did they? They wouldn't drop Looksmart, unless something else was already in place.

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  6. #6
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    Probably do everything themselves. They have the money and the ego to match. They already have the MSNbot eating up pages, not sure about what they will do with PPC, but i bet they do that inhouse too, like Google.

    "The successful man is the average man, focused."

  7. #7
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    I agree with TrustNo1 and think they will develop in-house. Microsoft has always prefered to build rather than buy. Will be interesting to watch over the next few months.

    Jeff

  8. #8
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    They'll wait until Looksmart's share price bottoms out, then buy them and fire the entire staff, transfer outall the technology and throw away the shell.

    THAT'S how Microsoft works.

    Jimmy James Inc. fan club membership # 3312

  9. #9
    ABW Ambassador Andy's Avatar
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    Sounds like the beginning of the end for LookSmart. I'm guessing that MSN will introduce its own search function. Their bot has really been hitting the net hard the last few months. There has to be a reason for that. We'll know soon enough.

    Andy

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  10. #10
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    Drewbert, hadn't thought of that!

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  11. #11
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    Yes, Microsoft must have something cooking.
    Next year is shaping up as the year when the search engine war for domination will occur... although it is already happening in the background (started a while ago, in fact). The three big players will go at it, but it will be very interesting to see what form this war will take and how the details will work out.

  12. #12
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    ROLMAO ...Looksmart saw this coming and jumped into enabling the BHO and traffic hijacking crowd and now loose their only legit partnership. Like those wanks will save their company. The DMA gets their gorilla marketing memberships earning potential gutted by outraged consumers. Stateside e-mail mass Spammers are being forced to partner with the 3rd world underworld of criminals with their branding messages. Telemarketers get their legs wacked by a Do-Not-Call voting list and vote seeking politicans. Sales of Ad Blockers, spyware/adware removal S/W and firewalls takes off making more money then the perps they protect us from ....

    Forces everywhere are getting my long standing message across ...Web surfers demand value for their money and time at the end of that click. LOL ...the advertising mindset folks are getting shoe horned into a shrinking web space.

    Last bastion of value add ROI advertising is the targeting of buyers by small site owners left out of the revenue picture for 7 years. Time for some major merchants to start sucking up to the neglected affiliate sales force. Their options are sure dwindling.

    Mike & Charlie ...

    If they won't adopt and feed a bird ..flip them one! BBQ some Gator and remember to flush WhenU..

  13. #13
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    Come the end of this year you may wish to have this info:

    FAQ 5
    Is my account balance refundable?"The money remaining in your account balance after you have cancelled all of your LookSmart listings is refundable. After you have cancelled your listings, you may contact LookSmart customer service for a refund of any remaining balance. (Please note that customer service cannot issue refunds until all listings in all campaigns in your LookSmart account are cancelled.)"

  14. #14
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    In the short run this could be a very good thing for most affiliate marketers. According to an article in Search Engine Watch, MSN doesn't plan on replacing LookSmart with another similar service.

    Search Engine Watch Article

    I think this would probably move the Inktomi listings nearer to the top of the page. That should help if you do well in Inktomi. The only bad part is, it all happens in January, after the holidays are over.

    Greg

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