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A Global CPA Marketplace Where There's 9.84% Of User 'Engagement'?

Swanson1 has done a Dame Nellie Melba and made (yet another) final 'curtain call'- when he returns to make a further comment on the Vince Martin instapost, "LookSmart Is As Good As Finished."

He had in fact, previously made the following solemn promise:

"I will not comment again, except when you accept Looksmart have taken a nosedive and are on their way out. Which will be at the announcement of Q1 2012"

With no such admission made by me (anywhere), I replied, as follows:

Great to hear from you once again, swanson1...Massive losses in Q1 2012? (Please disregard LOOK's shareprice value-as surely 'ignorance' can be apportioned any such blame.)

In a previous comment, you had also opined the following:

"LOOK is not a player in the markets or industry links you mention"

("They don't have any retargeting component to their business.")

About Q1 2012

Q1 2012 was the initial (3 month) period where Looksmart has fully operated it's new CPA/CPV model and now, without intermediaries. (With, just the one, only.)

Looksmart now offer direct targeting of 'in market' users.

It is also clear that the likes of Google, Yahoo, Microsoft, Facebook, and 7Search (among many others that include both agencies & brands) continue to remain LOOK marketplace players or, partners.

For Looksmart, "direct advertising" (with four new products under development and already tested with agencies), will - I've no doubt, prove very successful - when they get to be fully 'rolled out' (released) during the Q3 2012 period. (As was advised in the CC following Q1)

It really is important to note that Looksmart's independent global marketplace is now one where advertisers are able to connect with users who have shown 'search intent' on the major search engines. And, that includes from search queries made on Google, Yahoo/Bing and 7Search.

Users who are then (in real time) 'targeted' as and when they land on any publisher's page - and that's, anywhere across the total available, Looksmart publisher base.

This clearly includes at this stage (there's no doubt), sections of those search engine's own stable of publisher partners. And you must bear in mind that this is now, all soley based on the new CPA/CPV model or, offering.

Sooner or, later you and the market will get to realise what Looksmart has so often told us, in that: [2010 10-K Annual Report]

"LookSmart operates in a large online search advertising ecosystem serving ads that target user queries on partner sites.......We operate in the middle of this ecosystem, ........acquiring search queries from a variety of sources .......and matching them with the keywords of our search advertising customers."

Does it get any clearer?

So in terms of Looksmart and it's new business role, often used words by the company like "independent", "exclusive", "global" and with "over 5 billion keywords/phrases provided daily" mean very little to nothing, to both yourself and those like you --who simply don't want to accept what is being told to you/them. Maybe you are not listening?

TAC Payments

In view of this new (sole) CPA/CPV model, I recently wrote of the stated Q1 2012 traffic acquisition costs (TAC) for LookSmart's Ad Networks, in that it had decreased to 51%....

And that it is (I feel), representing a percentage of revenues being paid back to the Search Engines - to cover both their 'own publisher network' CPA 'clicks' payments and or, are partly for any other CPV impressions'. And that this also contains payment for the 5 billion or, so (daily) of search Data (on users), being provided-that have been acted upon.

I make the point that all this is coming from gross "comprehensive income" revenues of $3.64M, that the company has declared for the Q-1 period. - Income received as a 'middleman', in a marketplace.

Now if this was a 'flat' 20% commission that Looksmart receive from advertisers, then the total advertisers' own 'spend' for Q1 would then have been in the region of ($3.64M X's 5) some $18.2M.

This would then represent what becomes an annual advertiser spend (or, run rate) of some $90.8 million, under any conditions.

No matter how you may want to look at this, and in spite of your 'doom and gloom' - and that you feel I will 'lose every penny invested' (& why should you be concerned? You should short LOOK then?), evidence is clear this 'spend' will quickly grow. With "user" being the new 'black', and not content.

Now I want you to seriously consider the following:

.....with TAC @ 51% on Looksmart's advertising revenues of $3.64M, we should clearly see .....that the calculable gross margin of $1.79M now tells us that on an approx $18.2 million of advertiser's spend in or, across the marketplace-and purely as a percentage of advertiser spend ...........there's 9.84% of user 'engagement'.

And if this is not truly incredible swanson1, can you now please tell me in reply, of anything out there in the ecosystem that can even hope to get anywhere near, to matching this? :)

Always an enjoyment to reply to you Swanson1, with my own opinion.

LOOK: $0.7801 Down 0.0199(-2.49%)

Looksmart's close today gives it a Market Cap of just $13.49 million and the company has told of some $22.6M in cash. (End of Q1 - 2012). Someone out there tell me that this is not a crazy world we live in today?


Disclosure: Long LOOK and so comfortable in being so...