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Looksmart's $1M Free Cash Flow on Stated $6.6 million Q2 Revenues...

In a little over 16 minutes, Looksmart's Conference Call (& following the posting of the Co's Q2 Results), was surely enough time to tell patient shareholders that it's all systems go now.- With that much needed (and a long-time promised) increase in revenues now being the reality, in the current Q3 period. - tinyurl.com/3lmcvgc

investor.shareholder.com/looksmart/secfi...

It's finally happening, I strongly feel.

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Revenues from the Company's Publisher Solutions were $0.3 million in the second quarter of 2011, $0.9 million in the second quarter of 2010 and $0.2 million in the first quarter of 2011.

Q2 2011 Key Metrics Performance

   

Total paid clicks for the second quarter of 2011 were 146 million, compared to 190 million for the second quarter of 2010 and 146 million for the first quarter of 2011.

   

Average Advertising Network RPC for the second quarter of 2011 was $0.043 compared to $0.064 in the second quarter of 2010 and $0.056 in the first quarter of 2011.

   

Traffic acquisition costs (TAC) for LookSmart's Ad Network decreased to 48% from 58% in the second quarter of 2010, and 52% in the first quarter of 2011.

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The Traffic acquisition costs (TAC) for LookSmart's Ad Network decreased to 48% of the total sum of $0.3 million - that was duly collected directly from the advertisers after reaching any publishers' inventory from within Looksmart's own Ad Network and was then, subsequently paid on to them, during the second quarter of 2011. (Is what I believe is what this actually means.)

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[Added September 9th, 2011- The decreased in that component of TAC possibly means that generally speaking, publishers are now likely to be recieving MORE for paid clicks on their inventory. (As strange as that may seem). This is excellent because in cutting out the 30% - 40% that ad networks are taking from publishers, even a combined 20% commission (Looksmart's share & that share going to Google/Yahoo search engines & possibly Criteo), is up to half that being now kept, by ad networks)

WHY?

Because Looksmart are reporting revenues in terms of "Comprehensive Income" now!

This means that gross revenues stated are ONLY the total amount that Looksmart recieves (the percentage payment of each CPA/CPV paid click had across it's network) before, then passing on the TAC payment due, for Google/Yahoo (Microsoft) search engines.

(An agreed set percentage for the approx 3 billion Keyword 'user intent' targets as provided to Looksmart for Looksmart to then offer performance marketing to both advertisers and agencies (or, audience targeting or, the "re-targeting" of individual users across it's entire, global marketplace.)

tiny.cc/rfuw0

Read my post (at Google - contained in link below) )Looksmart Reports Comprehensive Income? What does that Mean?

tiny.cc/ld6hc

Go to this Google Link and read and learn to understand what this all means!

tiny.cc/xxda9

LOOKSMART LTD - FORM 10-Q - May 4, 2011
faqs.org/sec-filings/110504/LOOKSMART-LTD_10-Q/ - Cached
4 May 2011 - LOOKSMART LTD - FORM 10-Q - May 4, 2011. ... Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by ... these investments are reported as a component of Other Comprehensive Income (Loss) ..... As of March 31, 2011, the Company does not consider any of its ...]
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[Comprehensive Income] Revenues from the Company's Advertiser Network were $6.3 million in the second quarter of 2011, $12.1 million in the second quarter of 2010 and $8.1 million in the first quarter of 2011. - ($0.043 Xs 146 million ='s $6.278M)

The (carefully manipulated?) drop in revenues Q/Q is all to do with a steady move across to reporting in terms of ......"Comprehensive Income."

As some shareholders (and certainly the market) finally get to grasp or, better understand that Looksmart currently operate two separate business revenue streams (& what that means), the more they will then get to see the excellent future, that the Co has ahead of it.

Looksmart's core (and ultimate) business is it's global, independent OPEN Advertiser Network. Where partners (both advertisers and publishers), get to pay & receive directly, with each other.

[The other business is an almost pseudo-like Ad Network that the Co hides behind, while low costing employment based (and incentive type) options are being issued to both the Co's loyal and patient workers, and keenly collected by its greedy Directors.]

Looksmart are then paid what is a 'set' percentage on the successful bid price for each/all transaction/s conducted within it's Advertiser Network, marketplace. - This fully transparent payment is paid direct to Looksmart from the advertisers.

The advertisers then get to pay the remaining amount, directly onto the publisher or, their own 'representation'. (AppNexus, in the case of Microsoft's inventory, that is being represented, by AppNexus)

So, in stating it's revenues, Looksmart are NOT talking in "gross" type numbers, like many Ad Networks are! eg; ICLK? With a Market Cap of $140.62M

finance.yahoo.com/q?s=ICLK&ql=1

Compared to a LOOK market cap of less than $26M

finance.yahoo.com/q?s=LOOK

They (NASDAQ:ICLK) only made $100,000 on $26M in stated revenues, last Q2, quarter? (ReachLocal this afternoon posted Q2 revenue of $92.8 million, up 32% from a year ago - and yet, STILL 'managed' a loss for the quarter of 3 cents a share)

http://blogs.forbes.com/ericsavitz/2011/08/02/reachlocal-q2-revs-miss-but-loss-smaller-than-street-forecast/?partner=yahootix

If Looksmart were only recieving 5% of a winning bid (I feel it is 8%), this would then represent revenues in the region of (6.3 X's 20) $120 million for the Q2 Period! And for this period, the Co generated ONE MILLION in free cash flow. So....

Those that really need to know (Mikey), it's clearly a case of.....

Looksmart's own percentaged Advertiser Network revenue ($6.3M in Q2) is what is then paid direct to Looksmart, by the advertisers. - Looksmart then pay TAC to the likes of Google and Yahoo. Is simply how I am seeing Looksmart's revenues being explained to the market.

So Looksmart are clearly, only expressing it''s revenues as simply being the 'percentage' it derives from off of poorly paying eCPM transacted impressions and all paid CPA clicks. - With an 'average' RPC metric then being applied. Apart from those publishers based within the Looksmart Ad Network, who are then, paid directly, by Looksmart.

We know that this same Revenue from the Company's Publisher Solutions amounted to $0.3 million (or, 52% of the total publisher generated revenues within the Ad Network), in the second quarter of 2011, So 48% has then been paid onto the Ad Network's publishers, accordingly. (This payment would also represent ...... a LESS the Looksmart Advertiser Network 'transaction' percentage too, - is what I am imagining.)

Over the past 45 days (Looksmart's CEO told all) Looksmart has seen "stability" in the RPCs (revenue per click) coming from the Yahoo Partners. - No mention of Google, at all! - The CEO told of there being some 10 'prototype' accounts that had been (no doubt, all, freely) "testing" or, evaluating the performance of Looksmart's CPA (or, cost per action), Advertiser Network offerings to them. They are clearly happy.

Some of them were reported as saying: "I think we can now take some controlled risk and expand our accounts", is what CEO Demier advised all who listened in.
LOOK: 3:59PM EDT: $1.44 Down 0.01 (-0.69%)

The Co reported 'cash' of $26M (end of Q2) & today's close equates to just $24.87M. Amazing!

As all my posts are, ONLY my opinion.

LC

ps;

Re: IMPRESSIVE - $1M in Free Cash Flow...

Disclosure: Long LOOK and most happy to be so... Apart from the deviousness of it all!
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