LookSmart
LookSmart is an internet company, known for its Grub distributed web-crawling project.Looksmart was a directory developed by usually low-paid editors, none of whom were allowed to be members of a labor union. In that way, it is seen as the antithesis of Google which used algorithms to determine the relevancy of searches and which built a reputation for looking after its people well.
Having failed to build a retail brand of significance, Looksmart devised an approach of selling its web directory to portals much more successful than it.
In that time, some of the founders and senior executives made tens of millions of dollars selling what most thought to be its overpriced stock even though the accumulated losses of the company approached one hundred and sixty million dollars.
However, Looksmart built its strategy around the revenue and support of one client, Microsoft, failing to diversify. In 2003 Microsoft announced its support would be withdrawn, resulting in a loss of as much as 90% of Looksmart's revenue.
Prior to that, the founders Evan and Tracey Thornley had resisted a palace coup on the board from independent directors unhappy the husband and wife team intended to remain on the board. The independent directors resigned in protest at what they saw as inappropriate corporate governance. They were also concerned about class action lawsuits from Looksmart's customer base alleging fraud and other lawsuits from Looksmart's shareholders against analysts who had advised the purchase of Looksmart stock which fell from $80 a share in 2000 to as low as $1 in 2002.
Looksmart - as a result of a 2000 investment from BT they later wrote off - had significant cash reserves. Although many analysts question Looksmart's ability to survive the loss of their only significant client.
Looksmart is regarded by most financial markets observers as likely to be acquired at near cash value or to collapse following the loss of Microsoft's support.
