The performance at LookSmart (NASDAQ: LOOK) hasn't been too smart over the years. Even though the company is in the red-hot online advertising sector, it still can't seem to get an edge against Google (NASDAQ: GOOG), Yahoo (NASDAQ: YHOO), and Microsoft (NASDAQ: MSFT).
For example, in yesterday's Q3 report, LookSmart posted a meager 4% increase in revenues to $12.6 million. There was also a GAAP net loss of $4.3 million, or $0.19 per share.
So, to get things on track, LookSmart is rationalizing things. That is, the company announced it has sold its FindArticles.com division to CNET (NASDAQ: CNET) for $20.1 million in cash.
FindArticles.com is a niche asset, with an archive of 11 million articles from more than 3,000 sources. And, for the most part, it looks like a fit for CNET. Expect other content deals from the company.
However, as for LookSmart, it still has a lot of challenges. The company slashed 25% of its workforce and isn't providing any revenue guidance. In other words, things are going to remain cloudy for some time.
Finally, visit DealProfiles.com to check out other recent M&A activity.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
11-10-2007 @ 1:26PM
Mike said...
Good point about the lack of guidance. However during the CC interim CEO West noted they have several potential six figure clients in the AdCenter pipeline.
It should be noted as well that the company will be sitting on 57 million in cash and the current market cap is 56 million.
They are trading below cash.
Another important consideration is they have their entire building leased with MySpace taking over the fourth floor.
MySpace will move 200 engineers into the building and we heard this week they are developing their own AdCenter type platform...
Hmmm
11-11-2007 @ 3:03AM
tex said...
Interesting to note that Looksmart declined to give guidence for Q4 but them went on to say that they would be very close to cash flow positive at the end of December..........now isn't that guidence ?