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LookSmart goes Pay Per Click
Posted on October 3, 2003
Internet search firm LookSmart is
aiming to take on the big boys, Google and Overture,
with the launch of a new pay-per-click search service.
Like Google and Overture's products,
the new offering will enable advertisers to bid for
placement in search listings and only pay per click-through.
The company has been offering paid
inclusion for some time through its Looklistings service,
but opted for a model where advertisers paid a fixed
fee to be included in the commercial section of the
index. The previous offering also involved a relatively
small number of large advertisers, where as the new
service will be open to anyone, as LookSmart aims to
boost revenues and compete more effectively with Google
and the soon to be Yahoo-owned Overture.
Distribution partners for the new
product include Cnet, RoadRunner, Infospace and mamma.com,
as well as the LookSmart.com website. The company also
hopes to wrestle new partners from its bigger competitors.
"We fully intend to unseat Google
and Overture from any distribution we can with bid-for-placement,"
LookSmart VP of marketing, Dakota Sullivan, told Search
Engine Watch.
The company hopes that being an 'independent'
player will help make it more attractive to partners,
claiming that there is a need for an alternative and
independent PPC product for ISPs and portals, since
Overture agreed to be bought by Yahoo in July. At present
the only independent player left of any significance
is FindWhat.com, which is currently in negotiations
to merge with European firm Espotting.
Overture previously made a big play
on being 'independent', the benefit being that unlike
Google, it was not trying to attract traffic to its
own website. However, once the Yahoo takeover is completed
later this year, Overture will lose its neutrality,
which may cause a conflict of interests with some of
its distribution partners - potentially providing opportunities
for LookSmart to jump in.
European ISP T-Online has already
switched its search results from Overture to Google,
claiming that it sees Yahoo as a competitor, although
Overture is contesting the move in court since its contract
with T-Online has yet to expire.
LookSmart's decision to add bid-for-placement
comes as no surprise, as the company is under increasing
pressure to diversify and reduce its reliance on its
core partner, Microsoft.
In August, the company said its partnership
with Microsoft's MSN arm was in question, as the software
giant continues to develop its own web search technology,
and could eventually replace LookSmart's listings with
its own. The partnership accounted for 65% of LookSmart's
listings revenue in the second quarter.
By expanding into bid-for-placement,
LookSmart may also be hoping to lure MSN over to its
service from Overture - MSN is widely expected to end
the partnership with Overture at some point since Yahoo
is one of its biggest competitors.
However,
the company may have some way to go before it can convince
bigger partners to use its service instead of Overture
or Google, and also needs to rapidly ramp up the number
of advertisers on its network - it currently has around
30,000 advertisers, compared with Overture's 95,000
and Google's 150,000.
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