Interview with Dakota Sullivan of LookSmart

Vice President of LookSmart, Dakota Sullivan, is apparently a very busy man. Nevertheless, he finally took time out to be interviewed by Web Rank CEO Kalena Jordan. In the interview, Mr Sullivan reveals how the Yahoo/Inktomi deal will affect LookSmart, the new features LookSmart will be introducing for Small Business Listings customers shortly and why he thinks WiseNut is a better search engine partner for the major portals than Google:

(WR) = Web Rank, (DS) = Dakota Sullivan

Question 1 (WR) - With Yahoo purchasing Inktomi, how will this affect LookSmart's search results?

(DS) LookSmart, Inktomi and Yahoo are discussing our relationship going forward. For now, it's business as usual, with LookSmart listings being distributed throughout the Inktomi network, and Inktomi providing fall through results on LookSmart.com and on LookSmart's hosted properties.

Question 2 (WR) - A recent email from LookSmart Public Relations staff mentions "The Yahoo! deal makes LookSmart prime for partnership (or the picking!)". Are LookSmart currently looking for new business partners? Have LookSmart received any take over offers?

(DS) LookSmart already partners with more than 100 major portals, search engines and ISPs including MSN, About.com, AltaVista, Netscape, Inktomi, InfoSpace, Cox Communications and Road Runner in the US, MSN in Japan, Australia and the UK, Lycos in Japan and Yahoo in Australia. We are continually in discussion with other portals and search engines in the US and around the world, as we expand our distribution network.

Question 3 (WR) - Following the industry backlash last year when LookSmart moved from a directory to a pay per click model, there seems to have been a large loss of search market share and customer loyalty. Does LookSmart now regret their change of business model and are there any plans to counter the market share loss?

(DS) The truth is, our customer base has grown significantly since last April. At that time, a number of businesses had paid a one-time fee to be reviewed for our search directory,
yet we had no customers paying an ongoing fee. Today, we have more than 30,000 businesses renewing their accounts with us each month, and actively participating in their relationship with us. This spring, we'll be introducing the first update to our Small Business Listings product. The update will give customers more control over their account management and performance tracking, new tools to optimize their campaigns, and reduce costs for adding listings and making changes to their listings. Here are some of the new features you can expect:

> Simpler submission of new listings - automated checks that look for incomplete submissions or potential violations of editorial guidelines, ability to automatically upload a large number of listings for our customers who have applicable contracts (our larger clients), and greater detail around guidelines and submission requirements.

> Flexible options for grouping listings together - Multiple listing campaigns can be grouped together within a single billing account or each listing campaign could be set up in its own account, each with its own billing. (Note that monthly budgets can already be set up for each campaign)

> Different levels of on-line account access - Several people can be given access to the same account, but each person would have their own log in and password. Additionally, each user could be given a different level of access to the account; for example, one user would just be able to see campaign information, but not change it, while a second user had permission to view and edit campaign information. This will be highly beneficial to SEOs, agencies or other people who manage listings on behalf of clients.

> Ability to set flight dates - Ability to set a specific start date and end date for a particular listing campaign. This is especially relevant to advertisers with seasonal products or promotions. (Note that monthly budgets are already available to advertisers to help manage spending levels)

Question 4 (WR) - That same email from LookSmart Public Relations staff talks about how "LookSmart is plotting against Google". Can you explain this?

(DS) Google provides an excellent search experience, and has helped raise the bar in terms of search relevancy for the entire industry. However, Google's rapid growth has come at the expense of its partners' search franchises. Most new Google users are former Yahoo or AOL search loyalists. Our position is that the optimal search engine partner for the major portals is a company that delivers best of breed search relevancy, yet does not compete with their brand for ownership of the search user. With our purchase last year of WiseNut, a world class, next generation search engine, we're focused on meeting this need.

>> Question 5 (WR) - There have been some complaints in the various search engine forums about the inability to clearly track traffic from LookSmart pay per click campaigns or even clearly track keywords which will trigger an appearance of their listing. Given click-tracking is vital to ROI measurement and standard with PPC models like Overture and Google AdWords, do you plan to introduce a more transparent click tracking and reporting system in the future?

(DS) Today, LookSmart enables and encourages our larger advertising customers, who work directly with dedicated account managers, to add URL tracking to their LookSmart listings. This spring, LookSmart will be expanding this functionality to Small Business Listing customers who use our web-based platform. At that time, both large and small advertisers will be actively encouraged to include their own tracking on submitted URLs, whether the site is submitted using our on-line forms or via our account management staff.

Question 6 (WR) - According to this Ezula press release from 2001, LookSmart have partnered with Ezula. According to Scumware.com, there have been suggestions that LookSmart's partnership with the Ezula/TopText plugin produces false PPC clicks due to the way TopText siphons off traffic from other sites. With no way to track clicks and no accountability measures in place, people are understandably suspicious that their clicks are not "genuine" and instead come from TopText and affiliate links. Can you comment on this?

(DS) LookSmart no longer has a relationship with eZula.

Question 7 (WR) - Given LookSmart results now rely largely on Inktomi and MSN, what does a listing in LookSmart offer customers these days? Why should people advertise on LookSmart when they can get high rankings in MSN using Overture PPC?

(DS) Actually, LookSmart serves >45 million search results per day on MSN, About.com, AltaVista, Netscape, Inktomi, InfoSpace (Excite, WebCrawler, MetaCrawler), Mamma.com, Cox Communications and Road Runner. According to Media Metrix Digital Media Audience Ratings, LookSmart search listings reach more than 77% or 4 out of 5 U.S. Internet users each month through this network.

Specific to MSN, LookSmart's paid inclusion listings are an important complement to Overture's pay-for-placement listings for a number of reasons:

> Appear in core search results: LookSmart listings provide the main body of search results on MSN. According to an extensive network traffic study completed in 2002,
74% of search users click in this section of the page, while ~25% click in the Sponsored Listings section. Therefore, without LookSmart, advertisers are missing a large percentage of possible lead volume.

> Improved ROI: By using Overture's pay-for-placement for product introductions, seasonal and featured products and high margin products, and using lower cost paid inclusion for everything else, advertisers can get more total leads while lowering their costs, thus improving the return on their search investment. LookSmart's paid inclusion listings, at a flat $0.15 CPC, are an ideal way to get into categories on MSN that are hotly contested on Overture and have high bid prices.

> Access the full range of searches: 40% of all searches are for terms with 3 or more words. Unless an advertiser is willing to manage thousands of keywords, it's tough to capture all the 3,4,5 and more word searches that happen every day on MSN using pay-for-placement alone. However LookSmart's paid inclusion listings deliver this granular search traffic to advertisers automatically.

> Show up for more searches: On MSN, Overture listings only appear for the most popular searches. For example, do a search for "French cooking" or "men's jeans." You'll see that all the results displayed come from LookSmart or LookSmart and MSN. Using LookSmart paid inclusion listings alongside Overture pay-for-placement listings gives you access to a much higher volume of searches.

Web Rank would like to thank Dakota Sullivan for taking the time to respond to our questions.