LookSmart Deal Ending

LookSmart will no longer provide paid search results to MSN in the United Kingdom and United States after its current contracts end. The decision to drop LookSmart is related to MSN’s renewed effort to improve the relevance of its search results, but does not necessarily signal a similar fate for Overture, MSN’s other paid search partner.

Original Purpose: Directory Listings

In 1999, Microsoft and LookSmart signed a five-year contract to provide directory listings for the MSN Search Web site and MSN Search pane in Internet Explorer. These listings were selected for relevance through a “rigorous editorial process,” according to a joint press release issued by the companies at the time.

Over the next several years, however, LookSmart changed its business model: instead of charging Web sites a one-time fee to have its editors consider their sites (a practice favored by other Web directory companies, including Yahoo), LookSmart instituted a system wherein Web sites must pay a fee each time a user clicked on one of their listings. This changed the nature of LookSmart’s results: instead of selecting sites based on quality and relevance, LookSmart favored sites that got the most clicks. (LookSmart also continues to offer directory listings selected by volunteers at its subsidiary Zeal.)