LOK - The PPC Model

For anyone interested;

Though this article does not mention Looksmart, it is all about PPC (Pay Per Click). Looksmart has changed its model to PPC. This article highlights the growth in the PPC model with Overture being the first to introduce it as an Auction Model rather than a minimum PPC.

The 3rd quarter results on friday morning ourtime will show for the first time the amount of clicks and the revenue generated from those clicks. As well, JK will give us the all important 4th Quarter guidance. In otherwords Revenue will be able to be measured according to how well they are signing up customers and the average revenue generated from PPC.

Have a read:

""""NetTrends: Back to Basics for Internet Advertising

October 19, 2002 07:32 AM ET

PALO ALTO, Calif. (Reuters) - Internet media company Yahoo Inc. YHOO.O reported last week that its third-quarter revenues surged 50 percent -- even though its main source of revenue is online advertising, a business that everyone says is in a deep slump.

Another high point in the current earnings reporting season is expected to be Overture Services Inc. OVER.O , an Internet advertising company that will release results early next month and is on track to show revenues more than doubled from a year ago.

More and more, the sad saga of the online advertising business is looking like a tale of two separate industries.

On one hand, a generally soft online ad market continues to drive companies out of business, send penny stocks even lower, and make doubters out of some die-hard believers who once envisioned building media empires around online advertising. On the other, Overture's business is brisk and its rates are climbing.

Pasadena, California-based Overture is the reigning leader in the "paid listings" segment of online advertising, once a little known business that these days is just about the only game in town. Google, a newer entrant into this business, says it is also seeing strong growth.

Companies that advertise through Overture or Google essentially buy space that will appear in online search results. They can bid on a word or a phrase to assure that their name appears when people enter that term in a search engine.

These advertisers have bid on everything from "flowers" to "data recovery." Over the summer, Overture reported that they paid an average of 30 cents every time someone clicked on an ad, up from an average rate the year before of 19 cents.

Given the rapidly growing interest in paid listings, Overture's rates are likely to rise some more. The company this year has aggressively expanded its audience by signing up new partners in the United States and abroad, effectively sending its ads to an ever-growing world of Internet users.

Remember Yahoo's sharp rise in quarter revenues?

LESS IS MORE

Turns out, a key source of that spike was Yahoo's entry in the paid search business. Earlier this year, it partnered with Overture in a revenue-sharing agreement in which Overture's ads run at the top of Yahoo's search results. Take out the contribution from Overture and Yahoo's other advertising revenue was flat to down.

Yahoo said that the addition of paid listings helped it attract a host of small and medium-sized businesses that don't have the budget to buy expensive banner ads. Even as the rates go up, paid listings remain comparatively cheap. And, since they appear only to consumers who are already searching for information under a given topic, you are pretty much guaranteed that the people who see the ads have some interest in the product being pitched.

This success story is all the more striking considering the failure that surrounds it. From banner ads that are just too easy to ignore, to pop-ups that are too in-your-face to tolerate, the Internet industry has poured millions of dollars into all kinds of Internet advertising, convinced that if it could just find the right format, the money would start to flow in.

On the Internet at least, it seems that less is more. Paid listings are often equated to the yellow pages of a phone book: they are not loud or splashy but they are there to help whenever anyone goes looking for a taxi service or a carpet cleaner.

The more online companies embrace plain paid listings, the more they seem to be discarding the bells and whistles in their ads. AOL Time Warner Inc.'s AOL.N America Online division announced this week that in order to improve the user experience, it would eliminate most pop-up ads, which appear unrequested on the screen blocking most of the page.

The Internet search service Ask Jeeves Inc. ASKJ.O has also dropped some of the higher-tech ad formats and redoubled its focus on the plain old paid listings.

"I'd say this is the main growth engine," said Jim Lazone, vice president of product development at Ask Jeeves. "This is where it is all heading."

Lazone argued that it is not just the simplicity or the relatively low cost of paid listings that makes them so appealing. He said plain text ads just fit the Internet better than the moving images and mini-dramas featured in television ads.

"I don't think everyone has woken up to this, but search is the No. 1 activity online. The Internet is about information, not entertainment, and paid listings are congruent with that medium," he said."""
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looksmart are a secondtier Listings Search Engine, not a Portal like Yahoo.

Cheers markco