IAR: Paid Inclusion Hot, LookSmart Not

LookSmart became the latest paid search company to warn of tough times ahead thanks to cutthroat competition in the industry.

The San Francisco-based paid inclusion provider said its earnings for the year, before interest, taxes, depreciation and amortization, would be $13 million, down considerably from the $22 to $25 million it had forecast. LookSmart said it still expects revenue in the $140 to $150 million range. The company said the lower earnings would result from increased spending on product development, in the hopes of maintaining its lead in the paid-inclusion sector.

CEO Jason Kellerman said the revision was "based on our belief that a deeper level of strategic investment is required to support continued growth in the years to come."

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