Extends its Reach with New Portal Parterships
Andrew Goodman - August 8, 2000
From its inception,
Looksmart defined itself as a competitor to Yahoo!. It didn't seek
to compete with everything Yahoo! had become, however. Rather, it took
aim at a central aspect of Yahoo!'s product offering - the Internet directory
- and sought to improve on it, or at least offer a credible
second-to-market competitor. Every Coke can withstand one Pepsi.
Succeeds Where Many Have Failed
exactly the second company ever to come up with the idea of a helpful
categorized guide to Internet sites, of course. Even those "Cool
Site of the Day" things we all used to look at in 1995 did basically
the same thing - tell users where the good stuff is. But most big-league
attempts to play me-too in the Internet directory space owned by
Yahoo! had fizzled. (Whatever happened to
Magellan after it was acquired by
Communications ? Some of these sites are,
ahem, a little light on contact information today.)
Two things seem
to set Looksmart apart from others which had tried and failed. One
was its commitment to hiring the required editorial talent to build
a high quality directory. It's interesting to speculate that the
presence of Looksmart - and its availability as a quality directory
at the disposal of companies needing just that to power their portals
- made it even easier for companies like ExciteAtHome to ignore
or abandon completely their own in-house directory projects. A second
differentiator was that Looksmart built its model in part around
the premise that its editorial staff could be used to build
directories for the many major web properties needing such services.
Portals Have "Looksmart Inside"
At first, Looksmart
had a dual strategy of trying to drive traffic to the main Looksmart
site, and also building directories for portal partners
such as Canada.com.
Increasingly, however, Looksmart discovered that the Internet
economy was not so friendly to "big consumer sites." It has
now intensified its "infrastructure focus." A visit to
the main Looksmart site shows it looking more like a corporate site,
with information for partners and advertisers featured as prominently
as the directory itself. Like Inktomi and many others,
Looksmart now believes that its mission is to power the directory offerings
of others, be these major portals, international ISP's, or major
topical sites or news providers. One Looksmart official has commented
that its business model is something like "build once, sell many
times." One industry executive commented recently that Looksmart
is "basically a labor pool for hire - they hire their editors out
to companies wanting to outsource that function."
is, it's working. Looksmart has a growing client list and is now
the official provider directory services for a wide range of major
portals, notably various versions of MSN
around the globe, ExciteAtHome, Go2Net,
These business relationships, according to Scott Stanford,
Looksmart's VP of e-commerce, vary considerably from client to client.
Time-Warner chose Looksmart to sell their search based advertising
at sites like CNN.com, noted Stanford, because Looksmart could
sell the advertising for high rates. This general proposition
- of offering a directory to clients for a price which is "better
than free" due to the superior monetization of search traffic -
is now being shopped by Looksmart to other prospective partners.
Chooses Looksmart, Drops Open Directory
One recent convert
was AltaVista, which previously
used a combination of Looksmart and the Open
Directory for its category search. Last week, AltaVista announced
that it would make Looksmart its exclusive provider of category
search, in a deal that was interpreted in some circles as "Looksmart
paying portals to use it." A better way of putting it is that Looksmart
has revenue-sharing deals (undisclosed) with a variety of partners,
AltaVista being a recent one.
The fact that
it is embedded in the editorial content of a blue-chip list of portal
clients around the world means that Looksmart has begun talking
about the "reach benefit" of being listed in the Looksmart directory.
A listing in Looksmart, they emphasize, puts your site's listing
into all of the categorized search properties which use the Looksmart
directory - a total audience reach of 58 million. In the US, the
company boasts, the Looksmart Directory reaches 77 percent of US
It's no coincidence
that this benefit is being touted as Looksmart formally puts
an end to the free site submission process (save for charities and
nonprofits). Looksmart Express Submit is a $199 service which guarantees
that an editor will review a site for inclusion within 48 hours.
Applications can be made for the service through the Looksmart site
or through some of its major partners, such as MSN. Regardless of
where one applies for the service, a listing in the directory would
appear in all Looksmart-powered directories.
Lunch Ending as Paid Placement Takes Hold
So is this just
a pay-for-placement service? Looksmart says it isn't; that
editorial policies still apply. However, when pressed, Looksmart
officials allow that most any reasonable (i.e. paying) request
for a listing will make it into the directory. Porn or hate sites
are filtered out, but beyond those criteria, if you've paid
your $199, your chances of listing would seem to be close to 100%.
As an example, I attempted to describe a small (miniscule, actually)
knitted-sweater shop with hardly any sales and virtually no compelling
content on its web site. Stanford didn't bat an eye, suggesting
that a site for a cottage-industry storefront such as "your mother's
knitted sweater site" would be just the kind of site Looksmart would
"love to have." After all, someone may be looking for just such
a (fleecy) animal, and if there is a category for it, buyer
and seller alike are satisfied -- as is, no doubt, the
advertiser who places a relevant message in a highly granular subcategory
of the directory.
The policy change
was instituted in part to "take the noise out of the site submission
process," according to Stanford. Free of the huge volume of free
and "spam" submissions, editors will be able to spend time placing
paying customers into categories. But in addition, Looksmart's 200
professional editors will continue to spend the majority
of their time doing what they do best - scouring the web for
great content in the areas they cover.
figures weren't available, Stanford wanted to point out that Looksmart
has a larger and better-trained pool of editors than Yahoo!. Because
of this image of professionalism and due to the high quality of
its granular content, Looksmart believes it will soon find more
major customers for its "better than free" directory infrastructure
As more portals
are powered by Looksmart, the average surfer will be exposed to
more and more of its editors' handiwork. While Yahoo!
may be the king of portals, the "Pepsi" of Internet directory services
has quietly extended its reach by embedding its category search
into major portals around the globe.
Now if Looksmart
can convince AOL to ink a deal, that would be the biggest coup of
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