January 21, 2004

Troubled internet search firm LookSmart revealed that its CEO has stepped down as it continues to restructure its operations in the wake of losing its key partner MSN last year.

The company, which said last month that it planned to lay off half its global workforce, announced that Jason Kellerman has stepped down as CEO and board member and that a board-directed search for a successor is now underway.

In the meantime, Damian Smith, previously CEO of LookSmart Australia and VP International, has been appointed to fill the gap as the company's interim CEO.

The company also said in a statement that it has made substantial progress in its restructuring efforts, including recently selling off the assets of its Australian operation to its yellow pages business partner, Sensis, and the closing of its UK office, first revealed by Netimperative on 8 December.

LookSmart expects to reduce its headcount from 429 at the end of the third quarter 2003 to less than 200 by the end of the current quarter.

"The team and I are now completing the restructuring of the company to align our operations with the significant reduction in revenue expected," said interim CEO Smith. "We are dramatically cutting costs and positioning our pay-for-placement business for growth."

The global deal with MSN, which accounted for about a third of LookSmart's revenue, ended on 15 January. MSN said late last year that it had decided not to renew its agreement with LookSmart after tests revealed that its own search technology, alongside that of Overture's, provided better results.

On a good note, LookSmart said that it expects results for its fourth quarter to be better than expected with revenues between $43m and $45m.

It will report final financial results for Q4 and provide a more detailed update on its restructuring plans on 5 February.

Source: Net Imperative

        

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