• by Larry Dobrow , October 1, 2003

Making its push into the potentially lucrative pay-for-placement search market, LookSmart today debuted Sponsored Listings. The new service, which allows advertisers to bid for the search terms that are most essential to their business, will be distributed via LookSmart.com as well as on CNET, Road Runner and InfoSpace.

Given a U.S. Bancorp Piper Jaffray estimate that pay-for-placement will evolve into a $4 billion market by 2007, it's obvious that LookSmart wants to assert its presence in the space sooner rather than later. Vice president of marketing Dakota Sullivan, however, notes that LookSmart has been working on the product for some time, piloting it during the last year and a half with around 200 of the firm's biggest clients.

"Our goal is to give portals and ISPs a high-quality and large-scale option," he says, promising that the product will be "best of breed from day one."

Sponsored Listings was developed with an eye on the rapidly changing search landscape. LookSmart's theory, not surprisingly, is that the two dominant companies in the field have evolved in ways that may not sit well with advertisers.

"There was a need for a another proven player in the pay-for-placement space," Sullivan explains. "Overture and Google have largely had pay-for-placement to themselves, but Google has added more portal-like features - catalogs, blogging - and Overture was acquired by Yahoo!, so they're no longer independent." Clearly Sullivan views the latter development as a potential boon for his company: "[Yahoo's competitors] might not want to put dollars into Yahoo's pockets every month" by using Overture.

Kevin Berk, LookSmart vice president of product development, adds that the 30,000 advertisers for whom the firm provides paid inclusion search programs (via its acclaimed LookListings) had significant input into the evolution of Sponsored Listings. "It brings together the most popular features from solutions that are out there in the marketplace today," he says.

If all goes as planned, Sponsored Listings will prove the search product that allows advertisers to increase their conversion rates - and with the fourth-quarter shopping season just ahead, the timing of its debut isn't exactly inopportune. Additionally, Berk touts the compatibility of the new pay-for-placement tool with LookListings: "[Advertisers] can manage campaigns from one place. There's one place to buy it, manage it, be billed for it and more. It's much easier [to use], compared to Yahoo/Overture."

Sponsored Listings will also leverage most of the existing LookListing features, including its contact-management tools. "It has pretty simple one-click functionality," says LookSmart product manager Dave Graham.