LookSmart Ltd, which is facing its revenue and employee headcount being severely wounded by the imminent end of its partnership with Microsoft Corp, said yesterday it will move all of its customers to a new combined sponsored search offering.
The company will combine its recently launched Sponsored Listings service with its LookListings service, with the apparent goal of boosting the amount of click through revenue it obtains from its 30,000 advertisers.
Sponsored Listings, which was introduced in October, is a keyword-based bid-for-placement listings offering, similar to those offered by larger rivals Google Inc and Yahoo Inc unit Overture Services Inc.
LookListings is a paid-inclusion service where advertisers included in LookSmart’s index pay every time a web surfer clicks on their sponsored link. LookSmart distributes its links through portal partners including Lycos and RoadRunner.
All LookListings customers will be automatically signed up for the new LookListings, with their existing per-click fee translated into their initial bid price.
LookSmart CEO Jason Kellerman said in a statement this could result in potential cost savings to businesses, which will now have more control over how much they pay for inclusion in the index.
However, LookSmart likely hopes that the average amount its advertisers pay will increase. In the third quarter to September 30, the average pay-per-click was $0.16, compared to $0.17 a year earlier, according to regulatory filings.
By contrast, earlier this year, when Overture was still a public company it was reporting average pay-per-click of three times as much. Privately held Google does not report its rates.
LookSmart recently disclosed that it will lay off half its staff next year, after the end of its lucrative distribution deal with Microsoft’s MSN portal, set for mid-January.
This article is based on material originally produced by ComputerWire.