Microsoft will end it’s contractual relationship with LookSmart in mid-January (January 15) and will instead focus on building its own search tools. LookSmart gets almost 70 percent of it’s quarterly revenue by licensing its search results to MSN, so ending the agreement will deal a devastating blow to the company.
MSN Agreement With LookSmart to End January 15, 2004
SAN FRANCISCO, Oct. 6
Microsoft to End Licensing Pact With LookSmart (http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20031006-001042-1659)
October 6, 2003
Of course, after the news was made public, LookSmart’s stock began to plummet. Actually, LookSmart’s stock took a steep drop (21%) on August 15, when it became known that Microsoft was looking at options other than renewing its contract with LookSmart. Now that Microsoft has announced that it definitely will not be renewing its contract, LookSmart’s stock has dropped precipitously.
Stocks Slip Amid Earnings Caution
October 07, 2003 10:19:00 AM ET
By Elizabeth Lazarowitz
NEW YORK (Reuters)
“But LookSmart Ltd. (LOOK) fell 56 percent after Microsoft Corp.’s MSN Internet division will end its licensing agreement with LookSmart Ltd. in January 2004, the Web search company said on Monday, cutting off LookSmart from its biggest client. Its shares, the most active on Nasdaq, fell $1.69 to $1.33.”
Watch what happens to LookSmart shares on MSN Money – US:LOOK Quote.