Today's article by John Gilliam Looksmart Is Worth More Than Its Cash
(here @ Seeking Alpha) was well worth my commenting on. I've asked John to help explain a few of his stated thoughts. I welcome any further discussion with all who may be interested in doing so, too! :)
I want to know if John is aware of the fact (that in the "awful" Q1 that was just reported), Looksmart had a once off 'pay back' of around $1 million (my calculation), being the Co's total payment's received relating to poor traffic or, plain old click fraud?
Shareholders are (surely?) aware of the above situation, as one that was discussed in the CC following the Q1 Report. (There was no mention of an 'exact' figure.)
In a comment made here on a blog-post of mine, a former Looksmart 'customer' (in relation to the above - and posting as swanson1), sheds more 'light' in going as far as stating, that:
"Looksmart were left with over 10 million in chargebacks and over 2 million in accounts receivable in Q4 2011, Q1 2012 - they will not get that money back from advertisers."
(swanson1's disclaimer - "I am a former publisher and advertiser with Looksmart and now work with several big publishers that used to work with Looksmart".)
My point of concern (and in view of my own $1M guesstimate of the direct repayment cost to Looksmart- that "charge-back" amount - as was fully 'paid back', in the Q1 period) is that no one, including the article poster John Gilliam/or, others seem to want to address this. And,why is this so? [Note: That John has since replied to my initial comment.]
My strong belief is (swanson1), that.....
Looksmart weren't left with the stated 'over 10 million in chargebacks and over 2 million in accounts receivable' [up until & possibly including] Q4 2011, that was all addressed/finalised in Q1 2012.
Looksmart ONLY paid back a portion of the 'over 10 million' (in all), being it's commission - or, what represents the total of "comprehensive revenue", as was received-being part of the total Advertiser's Spend involved, that ran across the Looksmart Marketplace.
Comprehensive Income (Revenues) - tiny.cc/k6augw
[See - Bottom of Page 7 - tiny.cc/mxbugw]
(In June 2011, the FASB issued a new accounting standard on the presentation of comprehensive income. The new standard requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new standard also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. This new guidance is to be applied retrospectively. The Company is required to adopt this standard as of the beginning of 2012. Adoption of this new guidance is not expected to have a material impact on the Company's results of operations, financial position or liquidity.)
What Looksmart paid back represents only 10% of (swanson1's) stated 'over 10 million in chargebacks' - with the search engines (who LOOK pay TAC to - of around 50% - 'Traffic acquisition costs (TAC) for LookSmart's Ad Networks decreased to 51% in the first quarter of 2012'), repaying the remainder. (Being their share.)
Looksmart hasn't forgone (the swanson1's) stated 'over 2 million in accounts receivable'- it loses only it's Nett (10%) commission that it receives-after TAC is paid out to the search engines for 'search intent data' bought, on that accounts receivable total. (Meaning just, $0.2M)
Hey..Turn your TV off! Get with the 'program' or, continue on with your being 'fleeced'!!
Is simply part of how I am seeing things and only just my opinion.
LOOK: $0.89 0.16 (+21.92%)
Disclosure: Long LOOK and looking for some honesty, clearly.