Looksmart Group, Inc. · OTC:LKST
Looksmart — Investor Presentation (November 2010)
18 slides from Looksmart's investor presentation, Nov 5, 2010
Slide 1: Investor Presentation, November 2010
Jean-Yves Dexmier Executive Chairman & CEO Steve Markowski, CFO November 2010 Exhibit 99.1
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements, such as references to our business prospects. These statements, including their underlying assumptions, are subject to risks and uncertainties and are not guarantees of future performance. Results may differ due to various factors su
Slide 3: Company Overview
Company Overview • LookSmart is an online search advertising network solutions company – Operates in the affiliate segment and the Tier 2 segment of the online paid search advertising market – Aggregates traffic from a large number of publishers – Delivers traffic to a large number of advertisers •
Slide 4: Focus on Fundamentals
Focus on Fundamentals • Strong market opportunity • Significant competitive advantage: AdCenter platform • Quality will give LookSmart an edge on the competition • Establishing LookSmart business model • Building the future
Slide 5: US Online Advertising Spend, 2008-2014
US Online Advertising Spend, 2008-2014 . Total US Online Advertising Spend Source: eMarketer, December 2009 We believe search advertising will grow as the largest segment in online advertising. $23.6B $22.4B $25.2B $28.3B $31.0B $34.0B $23.4B
Slide 6: A Diversified Customer Base
A Diversified Customer Base • Intermediaries – Our Largest Category – Search Arbitrage reselling to large search engines – Backfill Customers with direct and arbitrage accounts • Direct Advertisers and Agencies – Transaction-based: CPA (cost-per-acquisition) – Page view-based: CPV (cost-per-visit) o
Slide 7: The AdCenter Platform – A Competitive Advantage
The AdCenter Platform – A Competitive Advantage • Long-standing Investment in Technology – Operating platform since 2002 – Developed with MSN and Ask.com until in-sourcing – Currently available for licensing on an opportunistic basis • Strong Feature Set – Granular campaign setting similar to large
Slide 8: Significant Investment - Quality Initiative
Significant Investment - Quality Initiative • Traffic Quality Management – Progressive increase of the quality scoring threshold – Feed mapping based on multiple quality indices – Systematic and aggressive traffic blocks • Platform Implementation – Most significant: quality streaming – Ability to se
Slide 9: Establishing the Business Model
Establishing the Business Model • Advertiser Network Revenue – It’s all about the traffic – consistent and predictable traffic yields consistent and predictable results for our customers – Combine the traffic quality improvement with account delivery efficiency and algorithmic enhancements • Margins
Slide 10: Building the Future
Building the Future • Improve the Throughput – 2 million clicks/2 billion queries daily = 0.1% throughput – Enhance our mining techniques and automate • Expand Addressable Market – Diversify delivery; e.g. social, mobile, email • Expand Distribution Network – Self-service Publisher initiative – Traf
Slide 11: LookSmart website: Quality Search Marketing
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Slide 12: Focus on Quality and Consistency
mil looksm Focus on Quality and Consistency Publisher Solutions $160 7 Advertising Networks $140 4 $12.0 $10.0 4 (Mittions) $6.0 4 $40 4 $20 4]
Slide 13: Optimizing TAC to Maximize Gross Margin
looksmart Optimizing TAC to Maximize Gross Margin 80% TAC Gross Margin’ 70% 60% 50% 40% 30%
Slide 14: Tightly Manage Expenses and Human Capital
looksmart Tightly Manage Expenses and Human Capital $90 a | | | 570 4 | | 4 | | | 320 4 | s10 4 oo = a Ur hr a - __! : $ : : : ? $ ’ s s s $ ¢ 2 ¢ ¢ ¢ € ¢ ¢ s $ = S é ¢ ? s & é ¢ Ss $ *Includes impairment charges of $9.8M in Q408, $0.2M in Q209, and $0.1M in Q409 * *Dec-08 not drawn to scale (total
Slide 15: Sustained Profitability
looksmart Sustained Profitability $10 $0.5 $00 3505) = (810) ors) 1 620) ° ¢ : 9 9 2 2 2 ° ° ° $ ? $ $ : $ $ $ 2 s s $ é é : é g ‘ é ¢ ¢ - # ¢ $ s 4 g § s $ * Dec-08 not drawn to scale ($12.45 loss) Ltd.
Slide 16: Tangible Net Worth
Tangible Net Worth TANGIBLE NET WORTH PER SHARE $1.49 September 30, Tangible Net Worth ASSETS Current assets: Cash and cash equivalents $ 22,297 Short-term investments 4,497 Total cash, cash equivalents and short-term investments 26,794 Trade accounts receivable, net 3,316 Prepaid expenses and other
Slide 17: Summary
Summary • PPC Search Advertising is a growing market and we continue to improve the business fundamentals to fully leverage our market opportunity • We have returned to profitability through a combination of tight expense control and gross margin improvement • We are now building the long-term value
Slide 18: Questions
Questions