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> LookSmart Infuriates Customers with New Pricing Model
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
> For a company called LookSmart, they are certainly not looking
> too smart to their customers right now. Complaints have flooded
> in regarding LookSmart's surprise move last month to convert
> to a Pay-Per-Click pricing model.
> Many people, including myself, expected LookSmart to follow
> Yahoo's lead in February to move to a re-occurring fee structure
> rather than the "pay once, be included for life" model to
> which people have grown accustomed. In case you weren't aware,
> Yahoo now charges $299 per year to maintain your site in their
> directory. In Yahoo's defense, they at least extended a
> "grandfather clause" to all the existing Web sites in their
> catalog prior to the change. If you paid for a review and
> were already included in Yahoo, you are NOT subject to the
> $299 yearly fee that new Web sites are charged.
> As expected, LookSmart has moved to a re-occurring fee structure
> like Yahoo. Unlike Yahoo, they've chosen to charge by the
> number of clicks your site receives rather than a flat yearly
> fee. Pay-Per-Click leader, Overture, has posted strong profits
> in recent years, which most likely was a factor attracting
> LookSmart to the PPC strategy. Unfortunately, LookSmart has
> managed to infuriate a significant portion of their customer
> base with what has been called "draconian" business practices
> by some.
> Here is a representative example of the e-mails I received
> regarding the LookSmart change:
> "LookSmart unilaterally announced its conversion to a PPC directory
> - no discussion, no grand-fathering, no consideration for
> its existing clients except an unacceptable credit over 20
> months. The arrogance of this company is extraordinary in
> their grab for more money. Their unilaterally derived click
> rate combined with my hit/sales ratio means that I would have
> to pay LookSmart more than my product's selling price for
> each sale.
> I have written LookSmart to object to their unilateral changes
> as a violation of my implied listing contract and to withhold
> my agreement to these changes. I have written twice and have
> received no response. I have also faxed my objections to their
> CEO, Evan Thornley concerning breach of contract - April 18th,
> no response."
> -- Paul Uptigrove. President, Dalgrove Inc
> Here is another quote regarding the change:
> "Looksmart has now removed my site, after I refused to increase
> my monthly click-through to $150 a month - couldn't afford
> to anyway, even if I wanted!
> It took only five days following their $15 credit, to sending
> me an e-mail saying it was all used up. But I have not received
> a single new inquiry from
> these 100 so called click-throughs, and there appears to be
> no way to check whether they are telling the truth or not.
> My site is very readable and informative on Celebration town,
> here in South Orlando, and was on page one on most conceivable
> keywords, after I spent many hours with Webposition Gold optimising
> it:
> Needless to say I am a bit upset, but I also think the searching
> public using Looksmart have lost access to an informative
> site on Celebration."
> -- Roger Hughes
> The anger runs so deep that I've even heard of several people
> calling for a class-action lawsuit against LookSmart. LookSmart
> contends that they are within their legal rights to change
> their listing agreement. Whether that turns out to be true
> or not, there is no question of what their customers perceived:
> If they paid their $299 fee for review and inclusion in LookSmart,
> they would not be charged again later to remain listed so
> long as their content, editorially, remained sound. Yahoo
> understood this and granted waivers to everyone already in
> their catalog. LookSmart apparently saw the dollar signs
> from strong-arming their entire customer base into the re-occurring
> fee structure.
> Aggravating the situation is the way LookSmart tries to spin
> the issue in an attempt to hide the fact that they are giving
> all their existing customers the shaft. Here's a quote from
> one of their e-mails:
> ==================================
> Dear Valued Customer:
> 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. Full details are available at
> Because you're a valued customer who submitted a listing before
> April 9, 2002, we've automatically upgraded you to Small Business
> Listings.
> Your account has already been updated and is ready for you
> to log in.
> We've waived the $49 set-up fee.
> We'll give you $300 in free clicks. Each month for the next
> 20 months you'll receive a $15 credit in your account - starting
> today.
> ==================================
> In the past, LookSmart's "Valued Customers" did not have to
> pay anything to remain in the directory. Now to keep the
> exact same listing people are being forced to pay anywhere
> from $150 per month as reported by Roger Hughes to as much
> as several thousand dollars or more per month reported by
> other LookSmart customers. How is this a "new, improved product"
> for the consumer?
> The paltry $15 per month credit at 15 cents per click that
> they issue you is often used up within days of converting
> your account depending upon your listings traffic volume.
> There's no question that this new pricing model is multiple
> times more expensive for anyone who had a decent listing on
> LookSmart before the change.
> Most people do not argue the need for LookSmart to turn a profit.
> However, almost no one agrees with their policy to de-list
> existing sites who already paid to be included in the catalog
> if they did not pay again.
> Here's a summary of the complaints I've received from LookSmart
> customers:
> 1. Tripled Charged: This latest price increase comes following
> the unprecedented move by LookSmart a couple months ago to
> quietly enroll in affiliate programs across the Web without
> informing affected customers. Therefore, many LookSmart customers
> paid up to $299 to be included in the catalog. Now they are
> being charged 15 cents per click to remain listed. Then some
> "lucky winners" get to pay LookSmart a third time via their
> own affiliate program for each sale or click through they
> generate through that same listing!
> At some point a company crosses the line between seeking profitability
> and exploiting their customers. In addition, according to
> recent LookSmart financial reports, LookSmart is already profitable,
> earning $2.7 million in the first quarter of 2002 BEFORE raising
> their prices.
> 2. Inaccurate Tracking? I've heard of several complaints
> from people who believe LookSmart may be over-stating click-throughs
> to their Web site based on what they tracked in their Web
> site logs. Normally on other pay-per-click services like
> Overture, you can insert your own tracking URL to log the
> clicks on your end and compare them to what the PPC engine
> bills to you. This helps hold the engine accountable. Unfortunately
> with LookSmart, you must request your listing be "changed"
> to insert a tracking URL. To request a listing change, they
> charge you $49 and do not guarantee that they will make the
> change.
> 3. Terms of Service Dramatically Changed: LookSmart changed
> their terms of service without notice and almost without restraint.
> The changes were applied retroactive to all their existing
> customers who purchased under the previous terms of service.
> Changing terms of service is not uncommon on the Web, but
> it is rare that a company is arrogant enough to change the
> pricing model so dramatically without granting a grandfather
> clause to their existing customers.
> 4. Refusing Refunds: Even if you purchased the $299 "pay
> once" service just days before the change-over to the PPC
> pricing, LookSmart has been reported to be refusing refunds
> to these customers. So much for the old adage of "satisfaction
> guaranteed."
> I know that credit card companies will issue refunds as much
> as three months after the charge if you formally request a
> charge-back. Since it can be argued that the product/service
> you purchased does not exist anymore, you may be able to persuade
> your credit card company to issue a credit to your card for
> your recent purchase. Even if your credit card ultimately
> refuses, LookSmart's card processor will be receiving a strong
> signal that LookSmart is doing something wrong. These processors
> keep a close eye on the number of charge-backs and charge-back
> requests a merchant receives. If they become too high, the
> processor may increase the merchant's fees or drop them altogether.
> 5. Sub-Standard PPC Features: If LookSmart's move to a PPC
> pricing model had been accompanied by some exceptional features
> to the consumer, then perhaps the change would have been easier
> to bear. However, unlike pure PPC engines like Overture,
> LookSmart is trying to cling to the pay-per-review model so
> they can still claim a certain amount of editorial independence.
> Be aware that when you agree to pay 15 cents per click with
> LookSmart, you are not guaranteed a certain ranking as you
> are on other PPC engines.
> In theory, LookSmart will continue to rank Web sites by the
> relevancy of their listing and not by how much they paid them
> to be listed. However, if you don't pay LookSmart, they imply
> you will be dropped from their catalog as many already have.
> Your site will reappear when you send them more money or your
> $15 credit replenishes the following month.
> The problem is that LookSmart gives you the worst of both worlds
> in my opinion. They have lost the credibility of including
> and ranking the most "valuable and relevant" Web sites to
> the searching public versus those who simply pony up the cash.
> This editorial independence distinguished LookSmart from pure
> advertising-based engines like Overture. Today, LookSmart
> includes only those who have paid them enough money to remain
> listed the entire month. Some people report that sites with
> affiliate programs, or with paid accounts are ranked higher
> on LookSmart. Certainly there is now every incentive for
> LookSmart to push paying accounts to the top in order to earn
> more click-through revenue. Their new pricing model works
> in direct opposition to their other important goal of ranking
> sites by relevancy rather than by the money LookSmart receives.
> From the perspective of the Web marketer, you do not get many
> of the benefits of a regular PPC with LookSmart. For example,
> on LookSmart you can't choose which keywords searches for
> which you'll be purchasing clicks. Most veteran Web marketers
> realize that some keywords will generate traffic that can
> be worth several times more per click as another keyword.
> Some keywords can be so broad that relatively few of the clicks
> will convert to sales. This problem can be solved on engines
> like Overture or FindWhat since you can choose exactly how
> much you wish to pay for a given keyword. Your listing then
> only appears for people searching on the keyword or phrase
> you chose and you pay only the amount you set as your maximum.
> With LookSmart, you could have a store that sold only discount
> science-fiction movies. You could end up paying 15 cents
> per click from people who searched only for the word "movies"
> or only for the word "science-fiction." Those people may
> be looking for movie information, movie tickets, Western movies,
> or any number of other things unrelated to your site. In
> all likelihood, the majority of visitors coming to your Web
> site from keywords that are too non-specific will not convert
> to paying customers. Therefore, although the 15 cents per
> click may sound less expensive than certain bids on Overture,
> the cost can be deceiving.
> Although you can submit suggested keywords to LookSmart, they
> do not guarantee what keywords or keyword combinations you
> will rank well on, or ultimately pay for. Nor do they allow
> you to pay less than 15 cents for less valuable keywords.
> In my opinion, these are serious flaws to LookSmart's version
> of a PPC program.
> 6. LookSmart Affiliate Agreements Cancelled - If you were
> a LookSmart affiliate receiving a commission to refer clients
> to their submission service, you most likely received a notice
> that your affiliate agreement was null and void effective
> immediately. It did not matter if you had a contract that
> said they had to give notice before canceling since LookSmart
> argues that the "Express Submission product no longer exists."
> Therefore, they argue that any contract based on that product
> is no longer valid. We're also told that LookSmart affiliates
> will eventually be invited to come back when LookSmart's partner
> relations department has come up with a new affiliate plan
> to offer. Until then, they are in essence telling all their
> affiliates "Adios, it was nice doing business with you."
> To me, this seems like an incredibly dumb move by LookSmart's
> management. At a time when LookSmart needs to be encouraging
> its partners to support them during this unprecedented pricing
> change, they are instead telling them to take a hike. Essentially
> they are saying, "Your contract is cancelled effective immediately
> and furthermore we have no alternative agreement to offer
> you until we decide to get our act together." To me, this
> smacks of arrogance and a general lack of respect not only
> to their customers, but to their partners.
> 7. Poor Support - Aspects of their new pricing policy can be
> confusing and difficult to understand with all the positive
> "spin" LookSmart adds to their explanation pages and e-mails.
> They try hard to hide the fact that the change is a major
> price increase. Unfortunately, a number of customers have
> complained about a complete lack of product support by LookSmart.
> Their calls and e-mails go unanswered. When you're being
> forced to pay out the nose for a service, you would hope that
> some of that cash is being used to improve customer support.
> 8. Lost Trust - I've seen many controversies regarding the
> search engines over the years. However, I've never seen an
> engine cause so much outrage in so little time than with LookSmart's
> recent changes. On one hand, they start their e-mails with
> "Valued Customer." However, they then follow with actions
> and policies that demonstrate little respect for those same
> "valued" customers.
> How Smart is it to Still Consider LookSmart?
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
> At this point you may be asking whether you'd be insane to
> consider spending more money with LookSmart, or whether there's
> a silver lining to be found? Unfortunately, I find it difficult
> to recommend LookSmart as a good value at this time as I have
> in the past. Although they previously charged up to $299
> for a listing, most companies who achieved top rankings recouped
> their investment and made a good profit. Today, there's many
> other factors to consider, making recouping your costs significantly
> more risky with LookSmart.
> If you know that you can make a profit paying 15 cents per
> visitor on most of the keywords found in your LookSmart description,
> then it may be worthwhile for your company. However, most
> businesses find their visitor to sales ratio varies significantly
> based on the keyword being searched. Your control is limited
> regarding which keywords or phrases your listing will appear
> under using LookSmart. Therefore, your risk will be greater
> with LookSmart versus other PPC's like Overture. Other PPC's
> allow you to bid precise amounts for specific keywords or
> phrases. Those companies who routinely pay more than 15 cents
> per click may still find LookSmart to be a reasonable value.
> The rest may have difficulty justifying the cost.
> How to Get a FREE Listing in LookSmart
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
> What should you do now? LookSmart's notice to customers gave
> them until July 10th, 2002 to activate their account in order
> to receive the $300 (i.e., 2000 clicks) of credit spread out
> over 20 months. I've noticed that once you activate your
> account, LookSmart starts charging you immediately for each
> click. Once your free credit runs out, most sites are de-listed.
> Some listings seem to be activated automatically by LookSmart,
> so don't be surprised if this happens to you.
> You can do a search on MSN, LookSmart's most significant partner,
> and discover that many sites appear to still be listed without
> having "activated" their accounts. If you put your mouse
> over a link, you'll see at the bottom of your browser that
> many links point to the Web site domain for the listing.
> Only some listings have a lengthy tracking URL embedded in
> the listing for the purpose of tracking the click-throughs.
> For example, we have one listing that we activated and one
> that we did not. The one that we did not activate is still
> listed on MSN without the tracking URL. The one we did activate
> does reflect the new URL and is rapidly running out of click-through
> credit.
> So, if you're smart you will NOT activate your account until
> July 10th (assuming they give you that choice). It would
> appear that you have a FREE listing until that time. Even
> if you want to redeem your credits, why start giving LookSmart
> your money now? Unfortunately, many people will jump right
> over to redeem that "generous" $300 of credit not realizing
> they may have a free ride until at least July 10th.
> Be careful about the notices LookSmart sends. I've heard reports
> of people getting e-mails that their account has run out of
> credit, implying that they are being de-listed, and to "renew
> now." However, don't assume they will de-list you automatically!
> They claim to review Web sites and if they feel the site offers
> significant value to LookSmart's catalog, they will leave
> your listing in their catalog for free! Of course, the bigger
> and more well known your site is, the better chance you have
> of them retaining your listing.
> If LookSmart does not entice enough people to purchase PPC
> listings, then they could find themselves in a bind. If they
> don't have enough paying customers to fill out the results
> for the thousands of possible queries, then they may be forced
> to display many listings for free.
> Certainly LookSmart must be cautious not to degrade the quality
> of their catalog too much or they risk losing the support
> of their significant partners, most notably, MSN. Therefore,
> you could be money-ahead to wait on giving them your credit
> card even if you think their 15 cent per click offer may be
> reasonable for your business. Use WebPosition's Reporter
> to keep track of whether your listing still exists in their
> database and whether it still appears for certain keywords.
> There's also a method that can help you obtain a completely
> free listing in LookSmart or Yahoo if you can structure your
> Web site properly. The technique is discussed in WebPosition
> Gold's Page Critic when you download this month's latest knowledge
> base update. Analyze your home page for LookSmart to find
> the new advice.
London Domain Summit 2023


Level 6
Apr 6, 2002
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You wern't wrong mattyp.

They allways kinda sucked anyway, but what can ya do, nuffin.

All search engines will finish up this way eventualy.

Inktomi is best value around these days.

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