Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Looksmart's MINUS $7M Enterprise Value ....

|Includes: LookSmart Group, Inc. (LKST), MIVA


Within this post re: Looksmart's Optimal Pricing .....comes the advice that:

##..< Understanding the advertiser's conversion metric and using Optimal Pricing, LookSmart drove click prices to between 10 cents and 30 cents.

.......... The advertiser's daily spend increased to $1,660, but more than doubled the conversion rate to 175, which totaled a lower CPA of $9.50, according to Schoen................... More clicks at a lower average rate and paying less per conversion is the key to Optimal Pricing, Schoen says. It's a combination of technology and service in the platform that allows LookSmart to understand how to value queries and extract the value from each click. >##

Re: AdKnowledge ....And silly Mike Mora from the US, who posts in OZ....

#...Stop the presses!! - The landscaper says ... "MIVA had little alternative... They were losing both revenues AND advertisers in droves as a result of their being in "no mans land" trying to compete with Google"#   

And those very "words" are from someone that had sold his 1000 shares in Looksmart @ $0.97c each. He really has his 'finger on the pulse' of things in this "space", no doubt about that! Ha!

Funny thing is, everything I said of MIVA (now Vertro Inc - VTRO) was pretty accurate and it's hard to see where they are heading now. It's not good for them, at all.

Reporting today, total Revenues of $6.0 million in Q2 2009, operating expenses of $9.0 million and a "cash burn" of $3.2 million (from March 31), leaves this stated, approximately 50 full time employees Co with just $8.3 million in cash at June 30, 2009. It's going no where fast, IMO.

An interesting article here compares VTRO (MIVA) with a recent unsuccessful offer of $16.5M made for Burst Media and the article opined, that:

<...Burst says the offer is far lower than it would ever consider and I believe they're right. 

Burst is sitting on nearly $10 million in cash and though sales are marginally lower [than VTRO] on a slight loss year-over-year, Burst remains the king of long-tail display ad publisher sites and its intrinsic value (in our publisher's opinion) is at least $50 million and it would be a bargain at that level.>

http://www.axcessnews.com/index.php/articles/show/id/18510

[Added 19th Sept., 2011 - Note that Blinkx has since, acquired Burst Media for $30M. - seekingalpha.com/user/36191/instablog/se... ]
 
$50M "intrinsic value", right?

Isn't it amazing how some people can find these type valuations, but the market (including silly brandon, the last 'basher' over at Yahoo, to yet realise), cannot see Looksmart having approx $30M in cash - revenues that are more than double that of the two mentioned above and the possibility, that this can now quickly grow from here in.

On Looksmart's over-night close ($1.36), it has a Market Cap of only $23.23M .. And that's well below it's cash level!!!

Worth also taking into account is, that in Q2 (and, according to an analyst at the MDB Capital Group LLC), when excluding the non-cash share-based compensation charges of about $0.5 million and depreciation and amortization expense of roughly $0.8 million, the company actually delivered non-GAAP cash income of about $0.2 million or $0.01 per share. MDB also note that the quarter includes a one-time $0.2 million impairment charge.

HMmmm? That's surely interesting....

It should definitely be taken into account that Q2 was clearly, very much about "tests" and the trialing both SmartRotation and with "select" advertisers, using Looksmart's new, "Optimal Pricing" ...

Looksmart's CEO Ted West has pointed out in the Looksmart CC, that:

<..."During the second quarter, the [AdCenter] platform processed well over 1 billion search queries and delivered over 2.2 million paid clicks per day.">

When considering that "BOTH" (SmartRotation and Optimal Pricing) are now fully released in Q3, I continually wonder if those above stated "well over" & "over" numbers that were previously reported as doubling could well have (maybe?) got to double once again? Afterall, in closing the CC, Ted West left this parting thought for all to 'chew over'....

<.................."There may be other opportunities and there are select few as we've talked about previously on this call, a few opportunities to serve other publishers, larger publishers within Ad Center license agreements, not unlike we have with our current customer ............... But I'm not going to make a commitment in this context to saying who or, when that's likely to happen".>


But 'each to their own' of course and always DYOR, as they say. It's surely ALL good from here, is my tip!!

Disclosure: Long LOOK shares....

LC