LookSmart CEO Steps Down
Reeling from the loss of MSN as a distribution partner, paid inclusion provider LookSmart said yesterday that it replaced its chief executive as it attempts to restructure the company without the source of two-thirds of its revenue.Damian Smith, previously head of the company's Australia operations, replaced Jason Kellerman, formerly chief executive and chairman of the board. Smith will serve on an interim basis while LookSmart's board searches for a permanent replacement.
Kellerman's exit comes nearly a week after LookSmart's paid inclusion search listings were removed from MSN's search results. Microsoft announced Oct. 6 that it would end its contract with LookSmart after undertaking a review that concluded the listings did not improve the relevancy of MSN search results. With paid inclusion, an advertiser pays to have Web pages crawled for inclusion in search results, though placement is not guaranteed.
Like Smith, who joined LookSmart in June 1998, Kellerman spent time heading LookSmart's Australia unit after joining the company in March 1999. In July 2001, he was named the company's chief operating officer, clearing the way for Smith to take over as CEO of LookSmart Australia. Kellerman rose to chief executive in October 2002.
Having lost MSN, LookSmart has begun a drastic overhaul that will more than halve its staff by the end of the quarter. LookSmart closed its United Kingdom operations recently and sold its Australia operations to its yellow pages partner, Telestra's Senesis division.
On the plus side, LookSmart said its fourth-quarter earnings would beat forecasts, with $43 million to $45 million in revenue and $8.7 million in cash generated. The company expects to end the quarter with $70 million in cash and marketable securities.
To make up for the loss of MSN, LookSmart has branched into paid listings, striking distribution deals with meta-search engines like Mama.com and InfoSpace and smaller search sites.
LookSmart's contract with another paid inclusion distribution partner, Inktomi, expires Feb. 24 and has yet to be renewed.
