San Francisco, California - (Website Hosting Directory) - March 12, 2008 - LookSmart, Ltd. has released its fiscal report for the fourth quarter and year ending December 31, 2007, reporting total revenue of $15.7 million.

Ted West, President and Chief Executive Officer of LookSmart noted, ''We are pleased with our fourth quarter financial results as we restored revenue growth in our core business through the focus on both online search Advertiser Networks and Publisher Solutions.''

Representing a 6% increase from $14.9 million in the fourth quarter of 2006, the report also specifies a 24% increase from $12.6 million in the third quarter of 2007. The Company's fourth quarter 2007 revenue results reflect a partial quarter contribution of $0.7 million from certain consumer assets, which the Company sold or retired in 2007, versus a full quarter contribution of $1.5 million from those assets in the Company's fourth quarter of 2006 revenue results. GAAP net income for the fourth quarter of 2007 was $13.2 million, or $0.58 per share, which includes a gain of approximately $14.5 million resulting from the sale of certain consumer assets of the Company. This compares to a GAAP net loss in the fourth quarter of 2006 of $0.9 million, or $0.04 per share, and to a GAAP net loss in the third quarter of 2007 of $4.3 million, or $0.19 per share. The EPS amounts above are based on 22.9, 22.8 and 22.9 million weighted average shares outstanding in the quarters ended December 31, 2007, December 31, 2006, and September 30, 2007, respectively.

Mr. West continued, ''During the fourth quarter, we executed a more efficient and effective operating plan serving our Advertiser Networks customers. In order to expand and diversify our advertiser base for organic growth in our ad network, we strengthened the sales organization, to bring new paid search customers and budgets to the network; we stepped up existing large account service to maximize budget utilization; and we improved traffic management to optimize search advertising results for advertisers on the network. Our Publisher Solutions customers benefited from additional product offerings and enhancements to our Ad Center platform, as well as investment in our sales and account management personnel as compared to the third quarter of 2007. The Publisher Solutions sales team continued to build a solid pipeline of new private-label clients for 2008, where we remain intensely focused on accelerating implementation cycles, driving conversion rates, and growing revenues across our open search advertising marketplace.''

Mr. West added, ''Looking to 2008, we continue to execute our strategic plan to best position LookSmart for significant revenue growth and progress towards profitability in online search advertising. Core to our growth strategy will be investing in the development and extension of our Ad Center technology platform, marketing it and selling it to online search advertisers through Advertiser Networks, and to Publishers through private-labeled online search advertising solutions.''

Gross margins declined slightly to 41% in the fourth quarter of 2007 versus 42% in the fourth quarter of 2006. The decline is due to a deliberate operating decision to accept higher traffic acquisition costs (TAC) in order to drive higher top-line advertising revenues and bottom-line profit contribution in the Advertiser Network.

Total operating expenses in the fourth quarter of 2007 were $8.1 million, which is inclusive of $0.5 million of non-cash, share-based compensation charges. This compares to total operating expenses of $7.8 million in the fourth quarter of 2006, which is inclusive of $0.5 million of non-cash, share-based compensation charges, and $10.9 million in the third quarter of 2007, which is inclusive of $0.6 million of non-cash, share-based compensation charges.

LookSmart reported income from operations of $13.0 million in the fourth quarter of 2007, as compared to a loss from operations of $1.6 million in the same period a year ago. Income from operations for the fourth quarter of 2007 includes a gain of approximately $14.5 million resulting from the sale of certain consumer assets of the Company.

On a non-GAAP basis, for the fourth quarter of 2007, Adjusted EBITDA (earnings before interest income, net, taxes, depreciation and amortization excluding stock based compensation) was $14.5 million compared to $0.4 million in the fourth quarter of 2006. Adjusted EBITDA includes a gain of $14.5 million from the sale of certain consumer assets of the Company.

Capital expenditures, including capitalization of internally developed software, were $0.9 million in the fourth quarter of 2007, compared to $1.1 million in the prior year period. Depreciation and amortization was $1.0 million in the fourth quarter of 2007 compared to $1.5 million in the fourth quarter of 2006, reflecting lower levels of capital investment. The Company ended the quarter with $56.2 million in cash, cash equivalents, and short-term investments, an $18.8 million increase from $37.4 million on September 30, 2007. The increase in cash for the quarter is primarily due to the receipt of net proceeds on the sale of certain consumer assets of the Company.

Q4 2007 Key Metrics Performance includes:

Total paid clicks increased to approximately 117 million for the fourth quarter of 2007 compared to approximately 105 million for the fourth quarter of 2006 and 84 million for the third quarter of 2007.

Average revenue per click (RPC) for the fourth quarter of 2007 was approximately $0.12, an increase from approximately $0.11 in the fourth quarter of 2006, and flat from the third quarter of 2007 at approximately $0.12.

Traffic acquisition costs (TAC) of 63% for LookSmart's Ad Network increased from the 61% rate in the fourth quarter of 2006, and the 59% rate in the third quarter of 2007.

Subsequent to the year end, on February 22, 2008, LookSmart repurchased 5,151,504 shares via a modified Dutch Auction tender offer at $3.40 per share for a total cost of approximately $17.5 million. The common stock accepted for purchase represents approximately 22.5% of LookSmart's common stock issued and outstanding as of February 13, 2008. As a result of the completion of the tender offer, approximately 17.8 million shares of common stock are issued and outstanding.

The Company also announced on February 26, 2008, that its Board of Directors has authorized a stock repurchase program pursuant to which up to $5 million of its outstanding common stock may be repurchased through December 31, 2008.

LookSmart is an online advertising and technology company that provides solutions for advertisers, publishers and consumers. LookSmart offers advertisers targeted, pay-per-click (PPC) search advertising and banners via its consumer web properties and a monitored ad distribution network; a customizable set of private-label solutions for publishers; and vertical search sites and web tools for consumers. LookSmart is based in San Francisco, California.

To learn more, please visit: www.looksmart.com.



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