Hairy,The Blodget/ Merryll Lynch lawsuit has nothing to do with...

Hairy,

The Blodget/ Merryll Lynch lawsuit has nothing to do with it.

It is investors going after M/L and Blodget. In fact, the lawsuit includes a number of other S/Engine companies.

It comes down to a breakout by Yahoo simply because it showed a 50% increase in its revenue over the last quarter and further growth for the next few quarters. As well, Overture, Findwhat will be reporting this month which are also expected to bring exceptionally good numbers. Look reports on the 24th.

What does this all mean? Companies in that sector that have the right model in place and are growing customers and revenue faster than its debt are going to be the star performers in 2003. The upward guidance for revenue in the next few quarters will reflect that.

The reason for Looksmarts poor performance over the last 6 months has been a number of factors.

1) Change over to the PPC model which brought a backlash from many of the SEO community.

2) A class action from the SEO's who believed they had been ripped of by Looksmart for not "Grandfathering" them into the new model.

3) 2 Directors resigned and Evan Thornley went from being SEO to Chairman.

4) A flat revenue for Q2. It actually performed slightly better than what was expected.

5) A poor US economy where anything less than spectacular was heavily hit. Of course, the recent failures of major US companies.

What has Looksmart got to look forward to:

1) Wisenut is the single most important strategy going for them. It has only just been updated since purchase.
Will be on par with Google for a) Relevancy b) D/Base
c) inclusions that Google don't have.

2) Looksmart has further extended its contract with both MSN and Altavista till end of 2003. This is very significant.

3) Since April, they have increased their PPC business listings by 25,000. This is not chicken feed.

4) They are still in the hunt with Yahoo.com as the Directory to supply listings to. There are 3 or 4 others in with a chance. If Look got that deal, it would increase looks exposure and revenue base by at least 25%. My opinion why Yahoo have not announced anything further is Wisenut still has not been totally integrated into Looksmart. However, are very close.

5) BTLooksmart have been signing up partners left right and centre. Whilst the revamping has been going on with Wisenut, BTLooksmart has been paying to use Googles S/E listings. This will stop as soon as Wisenut is fully integrated.

There are a host of other reasons including oversold but thats another story.