June 14, 1999
LOOKSMART LTD (LOOK)
S-1 Filing (SEC form S1)
We are a leading category-based Internet directory provider which has assembled what we believe to be the largest collection f high-quality, granular (highly specific) content on the Internet. Our LookSmart directory contains over 750,000 unique Uniform Resource Locators (URLs) in over 60,000 categories. Our directory is organized in an easy-to-navigate format that is designed to appeal to an audience of novice, as well as sophisticated, Internet users. We are the only major Internet navigation service provider that chooses not to list pornographic or hate material.
We distribute our proprietary directory to a large number of Internet users through LookSmart-owned Internet properties and through our strategic alliances. Our Internet properties, including looksmart.com, target primarily a focused demographic of female household purchase decision-makers and generate advertising and electronic commerce (ecommerce) transaction revenues. We broaden the reach of the LookSmart directory through syndication and licensing of our content. We currently provide our directory to leading Internet portals, such as The Microsoft Network (MSN), Netscape Netcenter, Excite@Home
and Alta Vista, and over 200 Internet Service Providers (ISPs), including IBM.net and NetZero. In addition, users can access our content and services through a network of over 600,000 website affiliates. In April 1999, more than 43 million individual Internet users accessed looksmart.com and the websites of our licensing and syndication partners, according to Media Metrix.
Our Market Opportunity
The Navigation Challenge. The massive volume and growth of highly specific content on the Internet has created the need for an organizing layer that can successfully match content producers with end users. We believe that most Internet organization efforts to date, such as traditional Internet directories and search engines, have failed to fully meet this challenge.
The Audience and Advertising Challenge. We believe that current Internet navigation services do not meet the particular needs
of what we call the New Media Familysm, a group consisting primarily of female household purchase decision-makers, many of whom are new Internet users. In addition, many advertisers cannot accurately target this audience using the Internet.
The Business Challenge. As the amount and specificity of Internet content has grown, the editorial challenge for ISPs, portals and vertical websites of maintaining high-quality directories has grown proportionally. We believe that these companies have a need for outsourced services to provide their search, directory and content solutions. In addition, the rapid emergence of ecommerce has created challenges for many businesses that hope to tap ecommerce opportunities.
To address these challenges, we offer several solutions to Internet users and businesses.
The Navigation Solution. We provide a leading category-based Internet directory that consists of what we believe to be the largest collection of high-quality, granular content on the Internet organized in an easy-to-navigate format.
The Audience and Advertising Solution. Through looksmart.com, we seek to package the LookSmart directory with other appropriate content and functionality to provide a simple, compelling experience for the New Media Family. Looksmart.com's benefits include: intuitive navigation, inoffensive content environment, differentiated visual design, content, commerce and community functionality. By targeting the New Media Family, we offer advertisers a unique opportunity to reach female household purchase decision- makers. In addition, we offer advertisers the ability to place their advertisements on category and
keyword results pages.
The Business Solution. We offer a variety of business solutions.
. We leverage our database by syndicating, licensing and distributing our proprietary content to leading Internet portals, websites and other media companies, and we provide ISPs with a full content solution for their users.
. We offer services that help both new and existing businesses optimize their online presence, including website enhancement
services for webmasters and seminars and services that enable small and mid-size business owners to sell their products and services over the Internet.
. We offer a variety of websites that allow buyers and sellers to find each other. These websites include rewardmall.com, an affinity Internet shopping mall site, and "Buy it On the Web", an Internet shopping website that promotes and sells over 30 "As Seen on TV" products.
Our Strategy
Our strategy is to be the leading category-based Internet directory service for global and local information on the Internet and
to derive multiple revenue streams by leveraging our directory asset. Key elements to our growth strategy include:
Expand Collection of High-Quality, Granular Content. We intend to expand both the number of high-quality URLs included in
our directory, as well as the number of categories into which we classify the URLs by continually adding new websites,
communities and ecommerce environments, deleting outdated links and updating editorial annotations.
Build the LookSmart Brand and Audience. To enhance business and consumer awareness of our brand, we plan to pursue an
extensive brand development initiative through mass market and targeted advertising. Our consumer branding investments will
focus specifically on reaching our target New Media Family audience.
Utilize LookSmart Content to Drive Multiple Revenue Streams. We intend to leverage our unique assets--the LookSmart
directory and the people and processes that create it--and monetize them by generating revenues through online advertising,
syndication and licensing, Internet outsourcing and ecommerce.
Pursue Strategic Acquisitions and Alliances. We plan to pursue acquisitions and alliances to strengthen our technology, broaden
our audience reach, capture new distribution channels or open new revenue streams.
Expand into Select International Markets. As one of only a few companies that have created a significant presence in the
United States Internet market with beginnings outside the United States, we believe we are well positioned to enter major
international markets in a locally-relevant, culturally-sensitive manner.
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