LookSmart Debuts CPC for Small Business

Paid search engine LookSmart is aiming to boost its appeal to small advertisers with a new cost-per-click (CPC) program.

Instead of charging a fee to be included in keyword-based paid listings, The San Francisco-based firm’s new product — Small Business Listings — charges advertisers only on a $0.15 cost-per-click basis. That could prove useful for smaller marketers, who thus pay only for click-throughs by interested consumers.

It also could prove lucrative for LookSmart, which gains recurring revenue out of the deal. Previously, after LookSmart accepted a small business into its paid inclusion listings, the advertiser was not charged ongoing fees.

LookSmart has charged small businesses monthly fees in the past. Its service, “Site Promote,” placed listings in the top three spots in search results in return for $29.99 per month.

But now, both LookSmart’s small business paid inclusion and the Site Promote service will be discontinued in favor of the new product — a move that could irk some users, who have never before had to shell out recurring fees.

To counter such concerns, LookSmart said it would credit these existing advertisers with a “large number” of free clicks as part of the transition. Specifics weren’t disclosed of the tradeoff, but industry insiders say the free clicks will likely be in excess of original paid inclusion fees.

“This initiative allows us to provide a better directory by having an active, ongoing relationship with each commercial site,” said LookSmart Chief Operating Officer Jason Kellerman.

The move comes amid increasing competition among the top three U.S. paid listings search engines. Market leader Overture this week filed patent litigation against Google, which only recently began offering cost-per-click pricing and syndicating its paid listings to other sites (as LookSmart and Overture have long done.)

LookSmart too has taken steps in the face of growing rivalry from Google, which has made a name for its search engine results among consumers and become one of the most-visited Web sites. Earlier this week, LookSmart closed on its acquisition of WiseNut, a firm with search technology said to be similar to Google’s.

At the time, LookSmart Chairman and Chief Executive Evan Thornley said the company planned to “focus all efforts on integrating WiseNut’s next-generation search technology to create an exceptionally relevant and profitable search solution for our distribution partners.”

“The combination of high-quality scalable search technology and strong listings revenue generation positions LookSmart as a clear leader in search targeted marketing,” he added.

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