It seems LookSmart has once again rocked the SEO world with its recent implementation of a new pay per click module called “Small Business Listings.”

Recently I’ve been receiving mail correspondence from my friends at LookSmart letting me know that they have automatically upgraded my client site listings to this wonderful new program. I naturally decided to have a look at the details.

Upon further review I have found that because I had already paid entrance fees into their directory my sites would be grandfathered into the new program. Isn’t that exciting? For new users the setup fee is $49.00.

The documentation of this program says that on top of the $49.00 setup fee new users will need to deposit a minimum of $150.00 to begin receiving clicks from the directory at .15 cents per click. Again, for privileged customers such as I there is not a fee at this time because they are giving me 100 free clicks per month for the next 20 months!

Okay, I know you are asking yourself what the catch is right? Well, lets get a little deeper and take a look.

First off lets start with the LookSmart letters. The letters state that to receive my free clicks I must login and activate my account before a July 11, 2002 deadline. Upon further review and in follow up correspondence from LookSmart I found this to be false as I have already been receiving clicks and have not yet activated my accounts.

In another letter from LookSmart I was told that my sites had reached their 100 free clicks per month limit and that my listings would be disabled until the following month. This, is also un-true as the listings are still active and when clicked take visitors to my sites.

Let’s face it folks, LookSmart has told us things in the past that have also turned out to be un-true. Should we believe them this time when they say, “Small business listings are a great investment for my business.” This remains to be seen.

Let’s do a bit of math here, and focus on the important issue at hand. Aren’t conversions the really important issue? Website traffic alone is not our goal nor yours I am sure, you want to sell your products right?

Based upon fees and average conversion rates this is what I have concluded. At $49.00 for the initial setup fee and a minimum of a $150.00 deposit this comes to $199.00. So, this $199.00 would buy you 1000 clicks at .15 cents per click. This comes out to, are you ready? A whopping average of 83 clicks per month over a 12-month period. Wow! Excited yet?

Okay so now you’re probably asking, “what ranking will my site have” and “how much traffic can I expect?” I also had these questions so I’ve done a little research and here are the results.

It is my opinion that with nobody out-bidding each other on LookSmart, site listings will be ranked according to site optimization techniques (Site Title, Description, etc.). Of course LookSmart still has editorial control over these things and from past experience it is probably safe to assume that LookSmart’s editorial staff has not improved to a point to increase your ranking. Overture allows site owners to modify their site listings, why not LookSmart? They do now? That’s right, I almost forgot. For another $49.00 I can modify my site listings title and description. Woo Hoo!

But, with all site owners paying .15 per click and nobody getting a boost based on the cost per click, it seems rankings will stay the same without paying the additional $49.00 fee to change the listings and only if LookSmart uses the title and description that I submit for them to use.

How much traffic can you expect? Well of course that depends on how well your site is optimized for rankings. But, just for fun I’ve looked into just exactly how much traffic LookSmart is bringing to my sites. While I realize that LookSmart has several partner sites that show its results, I have found using a tool called WordTracker that LookSmart is actually only receiving less than 1/2% (one half percent) of all search engine traffic. This isn’t starting to sound too good is it? Based upon an average conversion rate of 1% and only 83 clicks per month over the course of 12 months I am starting to question whether or not “This is a great investment for my business.”

After the July 11, 2002 activation deadline LookSmart says it plans to remove site listings of those who have not paid. What will this do to their database? Will their partners such as MSN still want to use their depleted results? Will the results be relevant to searches? Will LookSmarts listings get good click traffic? Will this be the death of LookSmart?

These questions and more all remain to be answered but as for now, my money is on Google AdWords Select and Overture. 83 clicks per month over 12 months for $199.00 just doesn’t seem like “A great investment for my business.”

Thanks LookSmart but at this time, no thanks!

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About the author:
Article by Kevin Gee. Kevin is a certified SEO specialist through Coastal Carolina University and has been performing SEO strategies for over 3 years. He is currently employed as Internet Marketing Manager at JUMP Internet Marketing.