Exhibit 99.1
LookSmart Announces Revised Fourth Quarter Guidance
Slowing Advertising Market Impacts Fourth Quarter Results, Company Accelerates
Transition to Fast-Growing Listings Businesses Through Restructuring
SAN FRANCISCO--(BUSINESS WIRE)--Jan. 11, 2001-- LookSmart (Nasdaq:LOOK;
ASX:LOK), the global leader in Web directories, today announced that revenue for
the fourth quarter of 2000 will be approximately $30 to $31 million, versus the
Company's prior projections of $33 to $36 million. Operating EPS before non-cash
items are expected to be approximately ($0.14) to ($0.15) vs. First Call
consensus of ($.12). Actual results will be reported on January 25, 2001.
"The trends we identified in our prior guidance proved to be true -- both
positive and negative," said Evan Thornley, chairman and CEO of LookSmart.
"Untargeted advertising is declining while highly targeted online direct
marketing is growing rapidly. However in the fourth quarter, the parts of our
business that were weakening did so faster and to a greater degree than
expected. At the same time, our highly targeted listings businesses grew over
40% from the third quarter despite very negative industry trends. For example,
Subsite Listings, launched in the third quarter of 2000, have already been
adopted by leading online direct marketers like Amazon and Ebay. Our listings
businesses overall have generated $10 million in their first three quarters, and
we now have more than 25,000 Express Submit listings and more than 25,000
Subsite Listings in the directory."
To implement its core listings strategy more aggressively, LookSmart is
restructuring its management and operations. The Company is exiting non-core
businesses, and has combined what were eleven operating groups into four. For
example, the Listings group will now become part of the sales organization,
reflecting the centrality of Listings to the Company's operations.
Through this restructuring, LookSmart will be reducing costs to maintain a clear
path to profitability, at a time of lower industry growth. As part of the
realignment, the Company has reduced staff by 31 percent or 172 employees.
LookSmart is also reducing non-payroll expenses, and has previously given
guidance on what it sees as a declining cost of distribution in the industry.
The estimated total savings from all these factors is approximately $44 million
on an annualized basis, and will result in a one-time charge in the first
quarter of 2001.
"We believe that at this time of industry transition, it is critical that we
are completely focused on the large emerging Listings opportunity," said Mr.
Thornley. "The changes we announced today reflect that single-minded
operational focus and our continued commitment to a clear path to
profitability."
LookSmart will hold a conference call today to discuss the revised outlook at
5:30 p.m. EST, 2:30 p.m. PST, and 9:30 a.m. Australian Eastern Daylight Time on
January 12, 2001. Investors can listen to the conference call over the Internet
at http://aboutus.looksmart.com. For those unable to listen to the live
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broadcast, a replay of the call will be available one hour after the conclusion
of the call at http://aboutus.looksmart.com.
About LookSmart
LookSmart (Nasdaq:LOOK; ASX:LOK) is the global leader in Web directories. With
31 directories spanning 28 countries, and 13 languages, LookSmart is committed
to organizing the Web. LookSmart distributes its databases to a vast network
that currently reaches more than 64 million US Internet users through over 400
partnerships including Microsoft's MSN, Netscape Netcenter, AltaVista, Excite,
iWon, Time Warner, Sony, Prodigy, Macromedia, Road Runner, Cox Interactive Media
and Qwest. BTLookSmart, LookSmart's joint venture with British
Telecommunications, deploys LookSmart's wireless and Web directory solutions for
ISPs, portals and mobile Internet businesses in countries across Europe and
Asia-Pacific.
Forward-Looking Statements
Except for the historical information contained herein, this press release
contains forward-looking statements that involve risks and uncertainties. Words
such as "will," "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," "may," and variations of these words
or similar expressions are intended to identify forward-looking statements.
Also, any statements that refer to expected revenues from existing and new
products, time lines for roll-out of new products, changes in advertising
yields, future expectations, industry projections or other characterizations of
future events or circumstances, including assumptions underlying these
projections, are forward-looking statements. These statements are not guarantees
of future performance and are subject to risks and uncertainties. Our future
results may differ from the results discussed or forecasted due to various
factors, such as the potential failure to restructure and cut costs at projected
rates; the potential failure of businesses, Web sites and Internet users to use
our targeted advertising products at projected rates; the possible failure to
continue to expand the LookSmart network and our traffic base at projected
rates; the potential inability to derive substantial revenue from new products
and services including the listings businesses; the possibility of an unexpected
increase in costs, expenses or other factors contributing to our burn rate; and
the possibility that we may not reach operating profitability as early as
projected, if at all. In addition, you should read the risk factors detailed in
our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the
Securities and Exchange Commission. Please note that we undertake no obligation
to revise or update publicly any forward-looking statements, whether oral or
written, for any reason.
Note to Editors: "LookSmart" is a trademark of LookSmart, Ltd., and/or its
subsidiaries in the U.S. and other countries. All other trademarks mentioned are
the property of their respective owners.
Contact:
LookSmart
Ned Brody, 415/348-7134 (Chief Financial Officer)
nbrody@looksmart.net
Liz Connaghan Haggerty, 415/348-7185 (Investor Relations)
liz@looksmart.net
Kathryn Shantz, 415/348-7104 (Public Relations)
kshantz@looksmart.net