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LookSmart

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LookSmart
Founded
  • 1995 (1995) (as Homebase)
  • October 1996 (as LookSmart)[1]
HeadquartersHenderson, Nevada, United States
Founder(s)
URLlooksmart.com

LookSmart is an American search advertising, content management,[2] online media, and technology company. It provides search, machine learning and chatbot technologies[3] as well as 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.[4]

LookSmart also owns several subsidiaries, including Clickable Inc., LookSmart AdCenter, Novatech.io, ShopWiki[5] and Syncapse.[6]

The current CEO of LookSmart is Michael Onghai[7] and the company is headquartered in Henderson, Nevada.[8]

Etymology

The name "LookSmart" is a double entendre, referring to both its selective, editorially compiled directory and as a compliment to users whom the company thinks "look smart".[9]

History

1995–1998

LookSmart was founded as Homebase in 1995 in Melbourne, Australia by husband and wife Evan Thornley and Tracy Ellery, executives of McKinsey & Company.[2] Reader's Digest invested $5 million in the company for an 80% stake.[2] The original concept of Homebase was to build a female and family-friendly web portal to supplement the Reader's Digest magazine.[2] After leadership and strategy changes at Reader's Digest, which reduced RD's focus on its online business, RD wanted to shut down Homebase, which would have cost $4 million in payouts and other termination costs.[2] The founders and former McKinsey's employee Martin Hosking instead proposed a cheaper leveraged buyout of Homebase.[2]

On 28 October 1996, the company launched its LookSmart search engine.[10] At launch, the search engine listed more than 85,000 sites and had a "Java-enhanced" interface.[10] In June 1997, the search engine underwent a major redesign, dropping its original Java-based browsing system.[11]

LookSmart was sold back to the founders as well as Martin Hosking through a leveraged buyout in 1998, with Reader's Digest providing a $1.5 million loan and retaining about a 10% equity stake.[2][12] Also in 1998, a search box was added to the LookSmart search engine along with People Search, Yellow pages, Discussions and shopping search.[13] In May 1998, the company raised $2.3 million from Amwin and $6.0 million from Cox Media Group and Macquarie Bank and was valued at $23.3 million.[2] On 21 December 1998, LookSmart stopped accepting pornographic advertisements.[14]

1999–2001

By 1999, the company had 500 employees and LookSmart was the twelfth most visited website worldwide with 10 million users, behind AltaVista and ahead of Snap.[2] In early-1999, the company reached an agreement to provide directory and listing services for Microsoft for 5 years. The deal provided the company with $30 million upfront and guaranteed payments of $5 million per year.[2][15] In late-March 1999, the company raised $59.6 million based on a post-money valuation of $430 million from Amerindo Investment Advisors, Citicorp Equity Capital, Cox Interactive Media, Hambrecht & Quist and others.[2][16] In May 1999, LookSmart formed a strategic partnership with direct-response marketing company Guthy-Renker and acquired some of their assets from their e-commerce division for $3 million.[17][18]

On 20 August 1999, during the dot-com bubble, the company became a public company via an initial public offering on the NASDAQ, debuting at $12 per share and raising $92.4 million based on a $1 billion valuation for the company.[2][19] LookSmart used the money it made from its IPO to open offices in Denmark, Canada and the Netherlands.[20] By October 1999, the stock price reached $30 per share, giving the company a market capitalization of $2.5 billion.[20] The founders' 15% stake was worth $375 million.[21] On 10 November 1999, LookSmart and BT Group founded joint venture BT LookSmart.[22][23] In December 1999, LookSmart purchased FutureCorp and its free email service Start for more than $5 million from its co-founders Michael Mak and Bardia Housman.[24] Also in December, LookSmart acquired 14.5% of the voting stock of Dstore Pty Ltd. for $300,000.[25]

In 2000, FindArticles, a website which provided access to articles previously published in magazines, journals, and other sources, was founded[26][27][28] as a partnership between LookSmart, which authored the search technology, and the Gale Group, which provided the articles for a fee.[29][30][31]

In March 2000, LookSmart's stock price briefly peaked at $72 per share.[12][32] On 28 March 2000, the International Olympic Committee (IOC) signed a sponsorship deal with LookSmart by adding a custom-built LookSmart directory to the Olympic Games' website.[33] On 30 May 2000, Juno Online Services reached an agreement with LookSmart to provide Juno's subscribers access to LookSmart's directory and LookSmart's stock jumped 8%.[34] On 26 July 2000, AltaVista reached an agreement with LookSmart for it to be their exclusive directory provider.[35] In October 2000, the company acquired Zeal for $20 million.[36][37]

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.[38] Also in January, LookSmart shut down Inside The Web and LookSmart Live! due to them being unrelated to their core business model.[18] On 17 January 2001, the company reached a deal to provide product categories from its directory to Amazon.[39]

Also after the dot-com bubble burst, LookSmart paid $90,000 to transfer 52.8% of its ownership of FutureCorp back to its founders.[24][25]

2002–2003

On 12 March 2002, LookSmart announced that they would be acquiring WiseNut for about $9.25 million in stock.[40] LookSmart completed their acquisition of WiseNut in April.[41] In June 2002, Thornley resigned as CEO but stayed on as chairman[42] and three of the seven members of the board of directors resigned in response, including Robert Ryan, Myriann Byerwalter and James Tananbaum.[42][43] In July 2002, BT LookSmart acquired UK Plus from Associated New Media (ANM) for an undisclosed amount.[44][45] On 1 October 2002, Jason Kellerman became the CEO of LookSmart, having previously served as COO of the company.[46] In early-December 2002, LookSmart paid US$3.5 million in cash and 1 million in LookSmart shares to purchase BT LookSmart from BT Group and subsequently shut down the joint venture.[47] LookSmart also returned US$1.5 million in restricted cash that was to be used for the funding of the joint venture.[47]

In January 2003, LookSmart acquired Intellectual property rights from Grub for $1.3 million in cash and stock.[48] On 6 March 2003, LookSmart announced that they had renewed an agreement with Time Warner Cable's Road Runner division to continue providing directory listings for Road Runner subscribers.[49] On 9 July 2003, LookSmart announced that they had reached an agreement to provide listing services in the United States for web portal Terra Lycos.[50]

In August 2003, LookSmart stated in a financial report that Microsoft, which accounted for 64% of the company's listing revenues in the last 6 months and 70% of the company's overall revenue, started testing its own search technology without LookSmart's listings on some of its websites in the United Kingdom and LookSmart's stock dropped more than 20% on 15 August and continued dropping on 18 August.[51][52] Also in August, William Lonergan became the new CFO of LookSmart.[53] In October 2003, LookSmart reintroduced its bid-for-placement ads in order to compete with Google and Yahoo!, which were previously offered through LookSmart's UK division.[54] On 6 October 2003, Microsoft announced that it would not renew its agreement with LookSmart and the company's stock price plunged 52.3% in a day and its stock fell to $1.44 per share.[51][55][56] In response to this, LookSmart fired half of its employees in December 2003.[57]

In September 2003, the company settled a lawsuit filed in May 2002 by Legal Staffing Partners after the company converted thousands of websites that originally had paid a onetime submission fee into a cost-per-click payment model.[2][58]

In 2003, LookSmart had a net income of $5.8 million and made $140.9 million in revenue.[59]

2004–2009

In January 2004, LookSmart sold its Australian operations to Telstra's online division Sensis and most of LookSmart's 30 employees in Australia started working for Sensis.[21] Also in January, Jason Kellerman resigned as CEO of LookSmart and was temporarily replaced as CEO by Damian Smith.[60] Starting on 15 January 2004, LookSmart's directory listings were no longer shown on MSN Search.[55] In April 2004, LookSmart acquired Net Nanny from BioNet Systems, LLC for $5.3 million in stock and cash.[61] On 1 July 2004, Teresa Dial replaced Thornley as chairman of the company.[62]

In 2005, LookSmart was forced to consolidate its shares after facing suspension from the NASDAQ.[32] On 15 March 2005, LookSmart had a market cap of $96.21 million and its stock price was at $0.85 per share.[63] In May 2005, LookSmart started providing Ask.com with its sponsored listings.[64] On 28 March 2006, LookSmart closed the Zeal directory.[65]

In January 2007, ContentWatch Inc. acquired Net Nanny from LookSmart.[66] John Simonelli, the CFO and COO of LookSmart, resigned in June 2007.[67][68] On 17 July 2007, the company sold Grub to Wikia[69] for $50,000.[37] On 1 August 2007, David Hills resigned as CEO of LookSmart and Edward West was appointed CEO the same day.[70] Also in August, LookSmart's management made the decision to exit consumer products and sell or dispose of their websites and assets associating with their consumer properties revenue stream.[37] Further developments in 2007 included Michael Grubb resigning as CTO of LookSmart on 7 September 2007,[71] LookSmart closing WiseNut in late-September,[72][73] the company delisting from the Australian Securities Exchange on 1 October,[74] the company selling Zeal on 15 October for $50,000,[37] the company selling FindArticles to CNET Networks on 9 November for $20.5 million,[37][75][76] and William Bush being appointed CFO of LookSmart on 20 December.[77]

On 14 January 2009, LookSmart had a market cap of US$28 million and its stock price was at $0.14 per share.[32] In March 2009, the company sold Furl to Diigo.[78] In May 2009, Ask.com, which accounted for 89% of LookSmart's company publisher solutions revenue in the first quarter of 2009, announced that it would not renew its contract with LookSmart for sponsored listings.[64] In December 2009, Jean-Yves Dexmier became the CEO of LookSmart.[79] On 31 December 2009, Ask.com ended its contract with LookSmart for sponsored listings.[64]

2013–present

In February 2013, Michael Onghai became the CEO of LookSmart.[80] On 2 September 2013, LookSmart's Canadian subsidiary, LookSmart Canada Ltd., acquired assets of Syncapse Corp. upon court approval for $3 million.[81] On 22 September 2014, LookSmart announced the launch of its Information Technology services offering Novatech.io.[82]

On 16 July 2015, the company had a market cap of around $3.6 million and its stock price was at $0.63 per share.[83] In October 2015, the company transferred all of its assets to its subsidiary, LookSmart Group Inc. and spun off the ownership of LookSmart Group to its shareholders.[84] LookSmart, Ltd., the company's former entity, completed a merger with Maritime Technologies Corp., a subsidiary of Pyxis Tankers Inc., on 28 October.[84]

On 24 March 2017, LookSmart Group completed a merger with its subsidiary, LookSmart Capital Inc. and LookSmart Group announced that it would de-register its common stock and suspend its public reporting obligations.[85] The company changed its trading symbol to LKSTD for 20 business days and changed its trading symbol back to LKST afterwards.[85]

On 3 April 2017, LookSmart Group announced the launch of its new data center building located in Central Phoenix, Arizona as a technology center, Silicon Canyon.[86] On 13 April 2017, LookSmart Group announced partnerships with the Clickable Institute of Technology, Entrepreneurship and Digital marketing and Richie Bello West to help veterans, minorities and immigrants at Silicon Canyon.[3]

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