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7 May 2003

LookSmart Shares Dive 43 Percent

Spooked investors drove LookSmart share prices down by 43 percent yesterday, following the company's announcement that it had reduced its earnings outlook for the year.

On Monday, the company revised its forecast 2003 earnings from between USD 22 and 25 million, down to USD 13 million as a result of increased investment in product development and unanticipated costs. LookSmart stock closed at $2.17 on the Nasdaq, after recovering slightly from a session low of $2.00.

>> Additionally, the company did not follow Generally Accepted Accounting Principles (GAAP) to issue a forecast for net earnings, claiming a lack of visibility because of variable accounting for re-priced stock options.

LookSmart's revised earnings outlook and share price plunge follows hot on the heels of Overture's similar earnings revision and share loss last week.

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