MySpace Invades LookSmart's Space
MySpace will take residence in the "LookSmart Building" according to BizJournals.com;
"Los Angeles-based MySpace made a triumphant entrance into San Francisco last week at the Web 2.0 conference, throwing a bash at SFMOMA and announcing that it was opening an office in the city with about 200 employees.
While the company did not disclose the location of its new offices, it has signed a letter of intent to take about 35,000 square feet at 625 Second St., according to sources. MySpace, part of Fox Interactive, ...... ."
This is an interesting development. LookSmart leased all 130,000 + square feet of the building in 1999 for a ten year term. From the beginning the building has been a bane for LookSmart dragging almost $400,000 dollars a month from their dwindling coffers. Earlier this year LookSmart announced the building had been sublet IN FULL, helping to stop the bleeding.
How can the full building accommodate the MySpace mob? It's possible a few of the startups occupying space have gone belly up but it's possible too the primary occupant, LookSmart may be readying an exit themselves.Let's examine the evidence. LookSmart has been selling off and dropping sites steadily over the last year. They shuttered Zeal with no explanation. They sold NetNanny for a song. Grubb was pushed over to Wikia for an undisclosed sum (guessing zero), and they just recently closed Wisenut.
Before Wisenut was closed they pulled the Dave Hills inspired vertical search sites.
The 180 vertical search sites are now folded into FindArticles but they are hard to find. Most of the subdomains are completely closed down registering 404 type messages.
Evidence exists suggesting they are in a deal of some sort with General Atlantic Partner property Network Solutions. Vortal.com (owned by NetSol I believe) houses the 180 vertical sites using the original LookSmart material. (under different URLs)
Combine the information above with the fact CEO Hills, CTO Grubb and CFO Simonelli (already past his announced departure date) have all quit and a picture of the future of LookSmart is unfolding.
It is interesting to note Dave Hills has a very nice severance that includes a sales position with the company. He is required to put in just short of one day per week, (15% of his work week) selling AdCenter etc. Interestingly, anything he sells he retains some residual payment. He will make more in this part time gig than he did as CEO and it's believed he still holds approximately 750,000 shares.
Early in the summer LookSmart retained the services of a Sand Hill Rd. venture capital law firm paying them in shares. This is documented in SEC forms that can be accessed from LookSmart's investor relations page.
LookSmart's job board has been downgraded. No more call for technical personnel. They are looking for sales and support people.
So will LookSmart's 200 (+ or -) employees move out to make way for the 200 MySpace folk?
SFGate.com wrote about the MySpace move to San Francisco Oct. 15 and did not mention the address though they knew the exact neighborhood.
Is LookSmart that far under the radar of everyone but a few shareholders?
If something is afoot I credit the LookSmart employees for maintaining the code of silence.
Absolutely nothing official or otherwise is coming from LookSmart lately that can shed light on what's really happening inside the big brick building.
Shareholders must resign themselves to guessing.
Update;
Valleywag linked to this post with an interesting take on the MySpace move into the LookSmart building.
Apparently LookSmart is moving from the fourth floor to make way for MySpace. In the LookSmart conference call Nov. 7 interim CEO West announced a 25% reduction in staff. He also announced the sale of Findarticles to CNET.
While the company remains fodder for bloggers and old SEO's with a grudge the company finds itself in the best condition since MSFT dumped them.
The company will have $57 million in the bank after the Findarticles deal closes which puts the value of the company at $2.46 per share. The stock trades at $2.40 as of Friday.
The company is valued below cash on hand. As it stands LookSmart has NO value! Of course it does but how do you value the company? On the publisher side AdCenter powers IAC's ASK.com, Reed Publising, Mainstream Media and others. In 2006 CEO Hills announced Facebook leased AdCenter but it's hard to gauge if it's been put to use in the new FB ad platform.
We know they are working closely with Wikia, interim CEO West mentioned in the conference call the two are actively working together. Currently LookSmart display ads are showing on selected Wiki's. On the advertiser side they serve ads to a variety of partners.
West announced they have several new AdCenter clients either signed or in the pipeline that will bring in six figures.
The biggest fish out there is MySpace who announced last week they are working on a self serve ad platform.
Hmm, seems awfully coincidental LookSmart is moving out of the fourth floor to make room for them.
I light of all of this LookSmart (LOOK) was upgraded to BUY by Craig-Hallum following the earnings report.
So LookSmart is moving . Not out of their building, just down a flight or two.
