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Longstanding investor in Looksmart (and a 69 yr old ex-tradesman), who has a passionate interest in the problems of newspapers along with their success in all their monetisation attempts made, on the web. For the "times are indeed, a changin", I feel. [17th of Aug, 2011 - Print media... More
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  • MSN - ASL - Yahoo and the Looksmart CC (1)


    ##.[In the Looksmart Conferance Call] - Ted West says ..

    ......."Based on industry estimates, LookSmart competes in the $1.5 billion non-proprietary keyword search advertising segment, providing search advertisers and publishers value across our search advertising network.. Those who compete with LookSmart in the non-proprietary segment share a relatively stable 20% of the overall keyword search ad market".## 

    ......Daniel Hung (a shareholder in Google, Microsoft and Yahoo), has made a few very interesting points in a nicely written article here, that is well worth posting some comment on. Microsoft vs. Yahoo: Long term merger arbitrage?

    But he is (I strongly feel), an absolute perfect example of exactly how ignorant the market is, in relation to what is going on here.....He says:


    DH - Basically, Microsoft will power Yahoo’s search and Yahoo will become the ad platform across both search properties
    .

    [True. Microsoft's Bing search, is to be used] 

    *DH - What becomes of Microsoft AdCenter seems hazy, but without access to a legitimate search destination, it will likely be phased out as advertisers prefer to deal with ad networks that have broader reach.
     
    [With Yahoo's ad platform, MSN has no use for AdCenter [it's adCenter] and this was a strong clue they gave when it was announced .... "Microsoft to kill adCenter Analytics by end of year"

    http://arstechnica.com/microsoft/news/2009/03/microsoft-to-kill-adcenter-analytics-by-end-of-year.ars ]


    *DH - In order to monetize effectively, one needs scale. Advertisers want to reach the most people for their ad dollars. Microsoft’s move here seems impatient. Instead of developing and nurturing an in-house ad solution, it’s signing a pricy deal to license Yahoo’s search IP and as well as pay Yahoo a premium to serve ads on its search results. The two companies immediately achieve scale which could win advertisers away from Google, but it’s a disincentive to Microsoft’s in-house Ad Center group. Will it survive this partnership? 
     

    [The writer (*DH......) is not aware of the Global aspect of, not just the scale (in terms of the search deal itself), but the 'icing on the cake' for Yahoo will be, & now having it's Ads soon, to reach out globally to more publisher inventory, and all around the world. IMHO.

    Certainly within that Ted West stated $1.5 billion non-proprietary keyword search advertising segment and this IS a US figure, only. In his summing up (in the CC) he makes that clear when in regards to Looksmart, he says:
     
    < "What does this mean for our long-term strategy, it remains our firm belief that significant industry value will be created through growth of the non-proprietary keyword search advertising market. With a highly fragmented $1.5 billion non-proprietary search business available in the U.S. alone, and no dominant player currently leveraging the scale">    

    An opinion - Continued in Part (2)......

    Tags: LOOK, GOOG, YHOO, IACI
    Aug 07 5:17 AM | Link | Comment!
  • Looksmart's publishers to receive 92% in the dollar?

    ##........................Looksmart's OWN Ad Network only (only?) had 207M paid clicks in the quarter. And has even increased it's TAC to get them. This all augers so well, really it does!! IMHO## 

    The above details are contained within my 'instablog' here, on "Looksmart's Q2 Report - Zero transparency, I'm afraid....."

    Yes ....."This all augers so well, really it does" !!  - And I will now tell you, why this is so ..

    There are much more exciting things to consider. From yet another post (on Y) Re: Where is the village idiot? "silly" Mike Mora (a poster from Sharecafe, over here in OZ, who sold his 1000 shares in LOK, @ $0.97c), had posted the following:

    #..As Lanczcaperz noted that doubling of queries didn't add crap Q2.#
     
    Helloooo?

    Are you saying that those "more than ONE BILLION daily queries" going through Looksmart's AdCenter platform and, that had produced over 2.2M paid click per day during the Q2 period, add up to nothing?
     
    The same 'enquiries' that (also) saw Looksmart's own (stand-alone) Ad Network grow it's paid clicks (Q/Q) by 23 million or, by 12.5% and by 12M or, more paid clicks or, 6.2%, Y/Y ....
     
    Yes, Looksmart's "own" Ad Network had 207M clicks @ .06rpc, in Q2. (And total revenues of approx-$12,000,000)
     
    But what of those (other) OVER 198,000,000 paid clicks (less the 207M) during the quarter? - Meaning the total number of paid clicks that had been recorded by Looksmart AdCenter, from it's private-labeled Advertising partners and other Ad Networks involved? Think about that for a moment!
     
    And TAC ?

    Of course TAC is going UP in this Q3 period and Ted West has told all, this will happen. You yourself Mike, have even boldly posted, that .... Looksmart will have Higher TAC, worsening margins as mentioned by the CEO in the CC.
     
    In the CC (yes, the Conferance Call) following Q2's Report Looksmart's CEO Ted West had answered a Q directed to him, accordingly...
     
    Q-? - Eric Martinuzzi: Okay, you've mentioned a gross margin impact from a higher TAC, historically or at least in recent history you've had TAC rates in the 62, 63% range. Where does TAC go from here?
     
    A - Edward F. West, President and Chief Executive Officer: "It goes higher and it goes higher materially."
     
    And, of course it does!

    And would you believe that TAC will be even as high, as "92% in the dollar" to go to publishers, Mike? (IMHO. But ......More on why, later)
     
    Ted West had also said: 
     
    < "We're going to manage and grow a performance segment with higher quality traffic over which we would anticipate to see – anticipate seeing increased advertiser performance and value with tools such as optimal pricing......... And to realize, improved CPCs in that segment while at the same time serving, as we have recently, the value segment of the marketplace.">  

    In a CC following a Q3 - 2007 quarter (I think it was this one) it was explained that Looksmart would recieve as low as "8% in the dollar" for facilitating the serving of Advertising in an Ad/Pub, live Marketplace. Looksmart were to 'manage', provide analytics, reports and all data on an equal to both parties basis, as members of the Looksmart OPEN Global "exchange". With all such International  'transaction' to take place with the USD as a standard, is how I understood it.
     
    You see Mike, that "higher quality traffic" Ted taked of would appear now, to (also) be all 'private-labeled' publishers who had provided the inventory for those over 2.2M paid click per day (whilst testing in beta) now getting to "join up" or, in with each other -In the 7/24 'live', RTB, AdCenter (auction based) marketplace.

    And all advertisers will be using SmartRotation, too!! I mean, they already are!!

     And from the only comment made (to the above sensational news coming from off an obscure website) comes the real question, that has been kindly answered from within the CC (follows this 'lone comment' & contained in my next post), I feel ...

    Edward says [and NOT Edward West, surely?] that he thinks the announcement, is: .........."Somewhat moot, given the destination is more responsible for driving conversion than the ads themselves".

    Continued .....

    Disclosure: Happy to be Long LOOK...


     

    Tags: LOOK
    Aug 06 8:05 AM | Link | 1 Comment
  • Looksmart - Segmenting into two disparate groups, says CEO Ted West

    From within the CC made (following the Q2 Report) Looksmart's CEO Ted West, (in answer to a question on the line from Brian Swift - Securities Research Associates), tells him to....

    "..think of our business really segmenting into two...I mean internally it's into many more. But think of it broadly as segmenting into two disparate groups, they can both – they [can] both operate successfully across the Ad Center platform."

    In this reply, and in what I feel is yet another (completely ignorant of the 'realities'), nasty type post made by Smart Look: today, (over on Y) Re: The Numbers, Mike Mora, the very same sour poster from ShareCafe in OZ says:

    "Fact is Tex they will lose IAC/ASK as a publisher partner, taking with it 85% of their publisher services revenues"

    Is this so?

    And Smart Look: in this post http://seekingalpha.com/user/109861/comments and, (from one who had sold his 1000 LOOK shares as low as $0.97c), has now even described the Co, as being a 'stagnating first gen ad network' .. HMmm?

    CEO Ted West told us (in the CC) that.........

    "It remains our firm belief that significant industry value will be created through growth of the non-proprietary keyword search advertising market.

    With a highly fragmented $1.5 billion non-proprietary search business available in the U.S. alone, and no dominant player currently leveraging the scale advantage of leadership and market share, we expect consolidation to play a key role in the future direction and value creation in our market. It remains our firm belief that significant industry value will be created"  


    And that ..

    "During the second quarter, we introduced SmartRotation and beta tested optimal pricing to improve the AdCenter's performance for advertisers.

    We believe that these performance features are comparable to those from each of the leading propriety search advertising platforms, but also that they are unique at scale among competing non-propriety search advertising networks.

    ......We fully understand that to replicate these performance features of scale would represent a significant engineering undertaking for any keyword search advertising provider.......... Indeed others in the industry have taken note of the LookSmart AdCenter as well. Just last week, the AdCenter was nominated again as a finalist for the best search engine ad platform for 2009 by panel of experts organized by the industry trade group Search Engine Watch. Last year LookSmart took this award home"

    CEO Ted West, further added:........

    "We have a long history of scalability and performance innovation on our AdCenter platform...... During the second quarter, the platform processed well over 1 billion search queries and delivered over 2.2 million paid clicks per day. The AdCenter platform is build to scale, and importantly to operate and deliver paid click transactions both quickly and reliably at that scale".

    Mike Mora..... I mean...????

    ....Does this really sound to you, like a 'stagnating first gen ad network' ?

    From the Q2 Report (and the CC that followed) I feel, that not only do we keep IAC/ASK as a private-labeled publisher Network partner (when the time comes to 'drop off' from the existing, direct hosting agreement) involvement, but more than likely, it being in a much larger capacity, than that of now.

    On IAC/ASK , CEO Ted West has advised all in his opening remarks, that:

    "It's our understanding that ASL has strategic plans to develop its own proprietary AdCenter platform in order to attain greater control over its search advertising networks business...... While no definitive platform transition plans have yet been discussed with ASL, LookSmart does plan to support ASL in transitioning to its new platform, however long and in whatever capacity their transition process requires. We also expect to continue to exchange valuable keyword advertising fees under a separate and mutual distribution agreement between ASL and LookSmart in the future". 

    And, again, from the Q&A within the CC .....

    Q - Brian Swift: 

    Okay. And I guess lastly, I mean the publisher side of your business has pretty much been dominated by one customer. Do you have any prospects for replacing that or if you haven't by the time that goes away are you just trying to -- it seems like you wouldn't be able to have enough revenue for any kind of economy of scale to support that business. Where do we see that going?
     
    A - Edward F. West, President and Chief Executive Officer:
     
    "Yeah, we will continue to serve other smaller publishers under the license agreements on our Ad Center platform............ And we've focused on the service commitments to those that are growing and offer a profitable opportunity to LookSmart.
     
    There may be other opportunities and there are a select few as we've talked about previously on this call, a few opportunities to serve other publishers, larger publishers within Ad Center licence agreements, not unlike we have with our current customer". 

    Now that I have (hopefully) 'cleared the air' of some missunderstandings of both Looksmart's business and the IAC/ASK relationship, I'll post more 'thoughts' on what I feel has come out of the Q2 Report and the Conferance Call that followed.

    Cheers to shareholders!

    LOOK; On Aug 5: $1.40 Up 0.06 (+4.22%)
     
    Disclosure: Happy to be a shareholder in Looksmart.

    LC
    Tags: LOOK
    Aug 06 1:45 AM | Link | 1 Comment
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