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Looksmart - Segmenting into two disparate groups, says CEO Ted West

|Includes: LookSmart Group, Inc. (LKST)

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 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.