LookSmart’s Vertical Search Strategy Under Fire (LOOK)

Peter Adams was CTO of LookSmart (ticker: LOOK) from 2001 to 2004, so investors should take careful note of his opinions about the company. Here's what he writes about the firm's vertical search strategy:

LookSmart’s 161 Vertical Sites

Full disclosure: I used to be CTO of LookSmart until I left last last year.

Late last week LookSmart had a big announcement that they had birthed their comeback strategy by releasing the first crop of vertical search sites - 161 to be exact. Needless to say I was intrigued to see what my former company had been cooking up over the last year. Having said that I don’t get it and neither do others.

These “vertical search” sites all seem like dressed up versions of category pages that pull together content from FindArticles.com, FURL, and the Looksmart directory. All of the sites looks the same except for the domain name (www.looksmarthardrock.com is my favorite).

This strategy seems like it’s more product development for Wall Street and not actual consumers - as the user experience of these template sites leaves something to be desired.

I wonder if they thought it was going to somehow increase their rankings in search engines by cross-linking all the sites like they do. Since all the sites appear to come from the same IP address they might actually get penalized by Google because they look a lot like a link farm.
peter-powerbook:~ padams$ ping www.looksmarthardrock.com
PING sv-verticals.looksmart.com (64.241.243.241): 56 data bytes
64 bytes from 64.241.243.241: icmp_seq=0 ttl=114 time=7.043 ms
64 bytes from 64.241.243.241: icmp_seq=1 ttl=114 time=5.088 ms
64 bytes from 64.241.243.241: icmp_seq=2 ttl=114 time=5.724 ms
64 bytes from 64.241.243.241: icmp_seq=3 ttl=114 time=5.644 ms
64 bytes from 64.241.243.241: icmp_seq=4 ttl=114 time=5.221 ms
64 bytes from 64.241.243.241: icmp_seq=5 ttl=114 time=5.767 ms
^Z
[1]+ Stopped ping www.looksmarthardrock.com
peter-powerbook:~ padams$ ping www.looksmartmutualfunds.com
PING sv-verticals.looksmart.com (64.241.243.241): 56 data bytes
64 bytes from 64.241.243.241: icmp_seq=0 ttl=114 time=4.848 ms
64 bytes from 64.241.243.241: icmp_seq=1 ttl=114 time=5.258 ms
64 bytes from 64.241.243.241: icmp_seq=2 ttl=114 time=6.034 ms
^Z
[2]+ Stopped ping www.looksmartmutualfunds.com

I know folks at LOOK know better than this so I’m not sure what I’m missing.

Clearly something.

After playing with these sites, it seems like the company is still stuck grappling with its past as an editorial directory provider and the inroads that we made over the last four years into algorithmic search.

Unfortunately that particular middle ground is a very hard place to build a business around.

It will be interesting to see this one develop.

LOOK chart below; click to enlarge.

Related:

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