Jean-Yves Dexmier Executive Chairman & CEO Steve Markowski, CFO November 2010 1 Exhibit 99.1 |
This presentation contains forward-looking statements, such as references to our business prospects. These statements, including their underlying assumptions, are subject to risks and uncertainties and are not guarantees of future performance. Results may differ due to various factors such as the possibility that our efforts to control expenses may not be successful, that our efforts to increase revenue and improve gross margin may not succeed, that we may be unable to gain or maintain customer acceptance of our publisher solutions or ad backfill products, that existing and potential customers for our products may opt to work with, or favor the products of, others due to more favorable products or pricing terms, that we may be limited in our ability or unable to retain and grow our ad and customer base, and that we may be limited in our ability to, or be unable to, enhance our products or our network of distribution partners. Additional risks that could cause actual results to differ materially from those projected are discussed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, our Annual Report on Form 10-K for the year ended December 31, 2009, and other documents we file with the Securities and Exchange Commission from time to time (available at www.sec.gov). The statements presented in this presentation speak only as of today’s date. Please note that except as required by applicable law we undertake no obligation to revise or update publicly any forward-looking statements for any reason. 2 Safe Harbor |
3 Company Overview • LookSmart is an online search advertising network solutions company – Operates in the affiliate segment and the Tier 2 segment of the online paid search advertising market – Aggregates traffic from a large number of publishers – Delivers traffic to a large number of advertisers • LookSmart at a glance – Founded in 1997; IPO in 1999 – 2009 Revenues: $52M – Employees: 61 – Headquarters in San Francisco; sales in NYC – Market capitalization: $38M (as of November 1, 2010) |
4 Focus on Fundamentals • Strong market opportunity • Significant competitive advantage: AdCenter platform • Quality will give LookSmart an edge on the competition • Establishing LookSmart business model • Building the future |
US Online Advertising Spend, 2008-2014 . Total US Online Advertising Spend Source: eMarketer, December 2009 5 We believe search advertising will grow as the largest segment in online advertising. $23.6B $22.4B $25.2B $28.3B $31.0B $34.0B $23.4B |
6 A Diversified Customer Base • Intermediaries – Our Largest Category – Search Arbitrage reselling to large search engines – Backfill Customers with direct and arbitrage accounts • Direct Advertisers and Agencies – Transaction-based: CPA (cost-per-acquisition) – Page view-based: CPV (cost-per-visit) or CPU (cost-per-unique) • Self-service – Search Arbitrage – Transaction-based advertisers – Page view-based / Visit-based advertisers |
7 The AdCenter Platform – A Competitive Advantage • Long-standing Investment in Technology – Operating platform since 2002 – Developed with MSN and Ask.com until in-sourcing – Currently available for licensing on an opportunistic basis • Strong Feature Set – Granular campaign setting similar to large search engine platforms – Unique granular setting of traffic selection within the network – Considered as a leading platform in the Tier 2 network segment • High Performance – Capacity for processing capability without degradation of latency – Linear scalability, currently processing about 2B queries/day |
• Traffic Quality Management – Progressive increase of the quality scoring threshold – Feed mapping based on multiple quality indices – Systematic and aggressive traffic blocks • Platform Implementation – Most significant: quality streaming – Ability to select, cap and block traffic based on multiple criteria • Account Delivery – Advertiser Performance Metrics drive traffic delivery – Customers want consistent, repeatable results 8 Significant Investment - Quality Initiative |
9 Establishing the Business Model • Advertiser Network Revenue – It’s all about the traffic – consistent and predictable traffic yields consistent and predictable results for our customers – Combine the traffic quality improvement with account delivery efficiency and algorithmic enhancements • Margins - Control Traffic Acquisition Costs (TAC) – Cap, block or provide for specific delivery parameters at the network, publisher, sub-feed or referrer level – Optimize our bid prices source by source, keyword by keyword • Managing Human Capital - Operating Expenses – Allocating resources where they have the most impact - Account Services, Traffic Quality, Distribution Network, Product Management |
10 Building the Future • Improve the Throughput – 2 million clicks/2 billion queries daily = 0.1% throughput – Enhance our mining techniques and automate • Expand Addressable Market – Diversify delivery; e.g. social, mobile, email • Expand Distribution Network – Self-service Publisher initiative – Traffic aggregation • Leverage our Human Capital |
11 WEBSITE UPDATE |
12 Revenue |
13 Gross Margin and TAC |
14 Operating Expenses * |
15 GAAP Net Income (Loss) |
16 Tangible Net Worth September 30, 2010 Tangible Net Worth ASSETS Current assets: Cash and cash equivalents $ 22,297 Short-term investments 4,497 Total cash, cash equivalents and short-term investments 26,794 Trade accounts receivable, net 3,316 Prepaid expenses and other current assets 896 Total current assets 31,006 31,006 Property and equipment, net 3,411 3,411 Capitalized software and other assets, net 1,871 111 Total assets $ 36,288 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 2,331 Accrued liabilities 3,247 Deferred revenue and customer deposits 987 Current portion of long-term obligations 1,180 Total current liabilities 7,745 Capital lease and other obligations, net of current portion 1,146 Total liabilities 8,891 (8,891) Stockholders' equity: Common stock 17 Additional paid-in capital 261,607 Accumulated other comprehensive gain - Accumulated deficit (234,227) Total stockholders' equity 27,397 Total liabilities and stockholders' equity $ 36,288 Tangible net worth 25,637 Fully diluted shares outstanding at September 30, 2010 17,244 TANGIBLE NET WORTH PER SHARE $1.49 |
17 Summary • PPC Search Advertising is a growing market and we continue to improve the business fundamentals to fully leverage our market opportunity • We have returned to profitability through a combination of tight expense control and gross margin improvement • We are now building the long-term value by leveraging our quality investment, expanding our human capital and augmenting our reach |
Questions 18 |