LookSmart Looks Bad
By Kalena Jordan (kalena@high-search-engine-ranking.com)
21st April 2002
You may have heard that Looksmart Ltd have made some changes
to their
business model lately. In fact, Looksmart have made the profit-driven
decision to move Looksmart.com from a Paid Submission based
directory
to a Pay Per Click based directory.
The first warning shot was fired on April 3rd, with an email
to existing
Looksmart customers announcing the impending launch of Small
Business Listings:
“Based on feedback from customers like you, we’ve
merged and enhanced the
benefits of our ‘Submit’ and ‘Site Promote’
products into one product called
Small Business Listings.”
Hmm… we thought, smells like pay per click. Discussion
boards and forums
worldwide were rife with rumours, complaints and concerns.
Feedback? What
feedback? Nobody put their hand up to say they had asked for
a PPC model.
Next came machine gun fire in the form of an email sent to
existing Looksmart
customers on April 12th:
“LookSmart has launched Small Business Listings, our
first pay-per-click
product for small businesses. This new, improved product replaces
both
Submit and Site Promote… Your account has already been
updated and
is ready for you to log in. We've waived the $49 per listing
set-up fee. We'll
give you $300 in free clicks per listing. Each month for the
next 20 months
you'll receive a $15 credit per listing in your account –
starting today.”
[I should take a moment to point out that currently, these
changes apply to
Looksmart.com only, not regional directory versions]. Meanwhile,
new
customers were asked to pay a $49 “set-up” fee and
an initial account deposit
of at least $150 towards future clicks. Existing Express Submit
customers
who paid the $199 or $299 one-time submission fee discovered
they were
only entitled to a maximum of 100 clicks per month instead
of the unlimited
number of clicks they were receiving under the old model.
Ouch. What’s
more, Looksmart demanded that these customers log-in and “activate”
their
accounts by July 11th (by entering their credit card details)
in order to receive
their “free” clicks.
All types of conflicting assumptions and questions began appearing
on the forums
and discussion boards. “What happens if I don’t
activate my account?”, “Will
existing listings stay the same if you do nothing?”,
“Will my site be dropped if
I don’t activate”, “What happens to my Looksmart
listings on MSN?”. So
confusing and misleading was the announcement from Looksmart
that some
people thought they were getting a huge bargain while others
believed they were
getting ripped off big time. To make matters worse, the Terms
of Service and
FAQ’s for the new Small Business Listings on the Looksmart
site seemed to show
conflicting information that changed each day we looked.
But it took a couple of days for the true deception to sink
in. Once people
began to log in and activate their accounts, it wasn’t
long before they
started receiving “Listing Traffic Interruption”
emails from Looksmart
announcing their sites had already received the 100 “free”
clicks allocated
as part of the new deal and would consequently receive no
more traffic
for that month, unless they increased their monthly budget
(in other words,
agree to pay $0.15 per click for all additional visitors that
month). One of my
colleagues received this email within 8 hours of activating
his account,
which meant that he was previously receiving more than 300
clicks per
DAY, let alone the oh so generous 100 clicks per month that
Looksmart
were offering him as part of the new deal. He worked out that
he would
need to add an additional $1,300 to his account each month,
just to
maintain the level of traffic Looksmart were providing him
under the
old system! Upgrade? I think not!
Here are some interesting tid-bits I’ve discovered about
the new model:
- Unlike regular Pay Per Click models such as Overture.com,
Looksmart are not giving customers control over their bid
amounts
and also providing no way to regularly update their listing
description
without paying $49 each time for the privilege.
- Sites previously receiving an unlimited number of clicks
per year
via the old system are now restricted to 1,200 clicks per
year, unless
they fork over more money.
- The new system has a $15 per month minimum spend requirement.
This means that if a listing fails to generate $15 worth of
click
revenue for LookSmart in a particular month, the site will
still be
billed for that entire amount
- Wording used in Looksmart’s announcement emails seems
to
deliberately mislead customers into believing their directory
listings
are going to disappear if they do nothing. The fact is that
the listings
may or may not be removed – depending on how “essential”
the site
is deemed to be by Looksmart Editors.
- Sites previously ranking well via their existing listings
will, in all
likelihood, lose these rankings whether they activate their
PPC
account or not, because preference will now be given to those
who buy “relevancy keywords” as part of their listing.
- By their own admission, Looksmart is unlikely to delist
big brand
sites, even if they refuse to pay for the new scheme, because
they
are “critical to relevance”.
- Looksmart claim the new program creates a lower cost of
entry
for small business whereas the start up costs actually come
in
at $50 more than the old Basic Submit model used by those
with
smaller budgets, not to mention the additional click costs.
- Apparently, LookSmart have been trying to force companies
whose
sites were included in the directory for free to convert to
their paid
programs. Looksmart’s attitude to these sites is “having
a free ride
doesn’t help the business model” and if they don’t
convert, they
are likely to be removed.
- Under the old submission programs, a single web site could
submit
up to five different URLs. The new program institutes a one
URL
per site limit, dramatically reducing the ability to target
and direct
traffic to the most relevant areas of your site.
- Many people who have activated their accounts and already
received
notification that their “free” clicks are used up
are checking their logs
and finding discrepancies between the number of clicks Looksmart
say they have provided and the number of actual clicks to
their site.
- Looksmart had the audacity to call this new model an “upgrade”
for existing clients, when in fact it reduces the value of
their listing
incredibly.
- According to industry leader Danny Sullivan, in the past
few days,
LookSmart has been automatically migrating accounts to the
new
system regardless of whether customers give their permission
by
manually “activating”.
Being an SEO, I have multiple Looksmart accounts for my own
sites and
those of my clients. I’ve already received six “Listing
Traffic Interruption”
emails. But I won’t be giving them another cent. Why?
Because Looksmart
no longer offers me or my clients value for money, for one
thing. But more
importantly, the deceptive nature of their announcement and
their decision
to force existing customers to roll-over into the new system
instead of
“grandfathering” their listings demonstrates to
me a complete lack of
understanding of their own market.
To put profits before customers might bring some short-term
shareholder
joy, but it will also guarantee a growing exodus of disappointed
clients and
users as they find more cost-effective and relevant search
alternatives. In
my book that’s search engine suicide.
Search engines and directories have done some pretty shifty
things over
the years, but never before have I seen such arrogance or
disdain for
customers as Looksmart have shown in the past two weeks. A
post at the
Web Master World search engine forums sums it up nicely:
“L$ is like the mob and they just busted my kneecaps…”
In fact this whole episode reeks of desperation, profiteering
and deception
on such a grand scale, you have to wonder if they are in serious
financial
muck. Whatever their motivations, it looks like they’ve
already pressed the
self-destruct button.
Disclaimer - The views expressed in this article do not necessarily
reflect the
views of Web Rank as a whole. In providing this information,
we make every
effort to ensure it is correct and up to date. However, because
of the widespread
nature of our information sources, no guarantee is given for
the accuracy of
content throughout this article. Web Rank disclaim all liability
in the event of
inaccuracies found.
More: http://listings.looksmart.com/
http://searchenginewatch.com/subscribers/articles/02/04-looksmart.html
http://www.highrankings.com/issue006.htm#seonews1
http://www.ihelpyouservices.com/forums/f12/s
http://www.webmasterworld.com/forum17/
~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
Article by Kalena Jordan, CEO of Web Rank.
Kalena was one of the first search engine optimization experts
in Australasia and is well known and respected in her field.
For more of her articles on search engine ranking and online
marketing, please visit www.high-search-engine-ranking.com
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