Rory Paterson
The business model previously charged a one-off fee for inclusion in the Looksmart.com Directory, nice and simple. Now a lower initial payment has been introduced, swiftly followed up with a pay-per-click model that charges $0.15 a click for all the web traffic directed to a site from Looksmart search listings, regardless of position, keyword relevance or any other factor.
The new model is all fair and well for large commerce sites that generate substantial revenue from sales, but what about the sites that don't? Think about informative sites for medicine, travel, hobbies or environmental issues. They don't make much money, if any, from providing the public with their knowledge, but they do attract high volumes of traffic.
It is not surprising then that since Looksmart announced this alteration many site owners and industry professionals have voiced their concerns and published critical articles in its wake - indeed, one company has gone so far as to file a class action lawsuit in relation to the changes.
The general consensus surrounding this issue is that the quality of the Looksmart database will be tarnished as the majority of highly informative sites will simply not pay the large sums of money required in order to be listed in the Looksmart Directory. Yahoo has already reported a significant rise in directory submissions since the Looksmart announcement.
Yahoo previously commanded the highest annual fee for inclusion however it now appears to be a more cost effective option, offering more relevant results with rapidly increasing search frequencies for important terms. Industry figures suggest this trend is likely to continue for quite some time, especially in the British online markets.
Looksmart have however hit back, claiming that if a site warrants inclusion in the database, but wants to opt out of the PPC model then they are perfectly entitled to do so. Unfortunately this has not proved to be the case as various unique and official sites have subsequently been removed, while others have been presented with forecasted budgets amounting to tens of thousands of dollars. If that was not enough there have also been a number of allegations relating to discrepancies in Looksmart's click reports.
It is important to remember that the aforementioned issues do not affect Looksmart in Europe, which continues to operate under the original business model.
Find Out What's Being Said About LookSmart here: http://www.wired.com / news / business / 0,1367,52741,00.html
