LookSmart Hits More Financial Snags
The San Francisco-based company warned late Thursday that it would not meet its earlier earnings guidance for year-end 2004 and announced a series of executive moves as it attempts to restructure its business.
LookSmart CEO David B. Hills blamed lackluster sales for the missed guidance. LookSmart said it expects to record a net loss for 2004 of between $9.8 million and $10.1 million. Its earlier projection had pegged the net loss at less than $9.4 million.
"The company did not sufficiently deploy sales resources against new advertisers to achieve the projections issued in late October," Hills said in a statement.
As part of continued restructuring, the company announced that it had reduced its number of divisions from three to two. It tapped two new executives to lead those divisions.
Deborah Richman was appointed as senior vice president of consumer products, while Bryan Everett was selected as senior vice president of sales. Richman will oversee LookSmarts consumer products, which includes Net Nanny, FindArticles and Furl.net. Everett will lead LookSmarts paid listings and syndication business.
The latest earnings and restructuring news follows a year in which LookSmart has been attempting to broaden its reach after losing major customers in its core search listings business. For example, it moved into personal Web service in September when it acquired bookmarking service Furl.net.
In January 2004, Microsoft Corp.s MSN division made good on an earlier decision to stop using LookSmarts listings. The MSN contract had accounted for about 65 percent of LookSmarts search listings revenue at the time.
MSN is undergoing its search transformation. It plans this year to switch its Web search results from Yahoo Inc.s technology to its own search engine currently in a beta test.
Other paid-listings partners followed MSNs lead. Sprinks and Inktomi ended their distribution of LookSmart listings in late 2003 and earlier 2004 after they had been acquired by search-engine competitors.
LookSmarts Hills said in a statement that the latest restructuring steps are aimed at bringing long-term growth to LookSmart.
"It is critical that we are organized in a way that lets us move quickly and have leaders who can set a tone of performance, speed and urgency," he said. "I believe we have accomplished this and we will be in better shape to realize the companys goals."
LookSmarts stock, though, was hammered by the latest news. As of midday Friday, LookSmart shares were trading down 18.2 percent at $1.48.
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