LookSmart loses its largest customer
Published: 07 Oct 2003 13:10 BST
Microsoft will not renew a contract to use LookSmart's Web search results on its MSN site, the search-technology provider announced on Monday.
The loss of the MSN deal is a severe blow to LookSmart, given than Microsoft was its largest customer. The relationship with the MSN Internet division accounted for 65 percent of LookSmart's listings revenue and all of its licensing revenue in the second quarter, which ended 30 June, according to the search-technology company. The company reported revenue of $38.4m (£23m) in that quarter.
The companies will remain partners until 15 January, after which LookSmart's listings will no longer appear in the directory layer of search results on the MSN Web site. Given that time frame, San Francisco-based LookSmart said it will not revise its 2003 revenue projections.
"We are very disappointed with the outcome of efforts to renew our agreement with Microsoft," Jason Kellerman, chief executive officer of LookSmart, said in a statement.
The dropping of LookSmart comes as Microsoft sets its sights on the Web search niche, both for its potential revenue and for future tie-ins with the Windows operating system. In July, Microsoft quietly launched a software program called MSNBot, which scours the Web to collect links and organises them into a search directory. Executives at the company have indicated a desire to create their own search engine to compete with industry leader Google.
More importantly, Microsoft is hoping to incorporate its search technology into the next version of its Windows operating system, called "Longhorn."
A Microsoft representative was not immediately available for comment.
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