LookSmart raises prices

• Jul. 2, 2003

In what appears to be a trend with search engines (when you leave from work one day only to come in the next day to a major change), LookSmart has completed a major change to how they do business.

Up until recently, all clicks through LookSmart and their partners cost $0.15 each. That meant that no matter how competitive the market may have been in other engines, like Overture, the advertiser paid the fixed price. A few days ago LookSmart overhauled the interface advertisers used to monitor bids, change descriptions, URLs, etc. There was no indication at that time of the changes to come.

As of July 1, all advertisers pay $0.15 for the first 5000 clicks ($750). Anything over this limit now costs more, depending on the market you are in. For example, auto related sites now pay $0.23 on any clicks over 5000, while other sites can pay up to $0.75 per click after the first 5000.

On its own, this may not seem like a big change. After all, LookSmart is considered a small player in the PPC market. But when you consider that they recently renewed an agreement with Inktomi, the picture starts to get a little clearer.  Inktomi as we all know is now owned by Yahoo!. We also know that Yahoo! has been upgrading their search service and one day soon they should stop showing Google results in favor of their own Inktomi results. Therefore, there is a good chance that you will see LookSmart listings at the top of the Inktomi listings.

Does this mean that Overture is done as well? Perhaps Yahoo! will replace the Overture listings with LookSmart. Maybe Yahoo! will be testing LookSmart for a period of time and then buy them. This could be why the click price was raised - as part of a pressure tactic from Yahoo! After all, Yahoo! gets a good portion of their income from Overture. Perhaps Yahoo! is looking for a way to reduce its reliance on Overture PPC by introducing a new PPC partner who will eventually replace Overture.

Of course this is all speculation, but stranger things have happened in the search engine world.

Rob Sullivan
Production Supervisor
Searchengineposition.com
Search Engine Positioning
specialists