LookSmart Renews AltaVista, Expands MSN Deals

Search engines continue jockeying for prime position on the major portals, as LookSmart renews one major distribution deal while expanding another.

Through the agreements, San Francisco-based LookSmart will continue to provide its Directory Listings search results to AltaVista under a one-year renewal of an earlier deal between the two companies. The search results will appear under AltaVista’s “Directory” tab.

LookSmart also will distribute its Small Business Listings to Microsoft’s MSN portal, in addition to Directory listings that it had previously syndicated to the Redmond, Wash.-based portal. Both distribution clauses expire on Dec. 3, 2003.

In addition to distributing listings, LookSmart’s also licenses its database to MSN to provide search engine listings as a supplement to MSN’s own results. That agreement also runs through early December, 2003.

MSN and AltaVista both receive cuts from cost-per-click revenue from the listings. Terms were not disclosed.

LookSmart first began work with MSN in 1998, when it was tapped to replace Yahoo as MSN’s supplementary search provider. Two years later, it signed its first deal with AltaVista, initially through a European subsidiary, BTLookSmart.

The news is the latest in the string of distribution deals signed throughout the year by the major players in online search, with Overture , Google, LookSmart and FindWhat each signing new alliances — often at the expense of rivals.

But LookSmart’s newest distribution agreements also underscore the jumble of alliances and partnerships throughout the space. While it relies on LookSmart for small business and database listings, MSN also works with Overture to provide still more paid listings in its search results. AltaVista also renewed its contract with Overture to provide sponsored listings.

Such arrangements allow revenue-strapped Web portals to squeeze the best terms from search providers, while at the same time reaping the benefits of outsourcing a search-results sales force to a network, which can command higher pricing.

They also provide easy outs for portals, who have taken advantage of their ability to change partners as a number of deals have come up for renewal this year. Google, for instance, replaced Overture as AOL Time Warner’s provider in May. And in many cases, most deals now being struck for search tend to last only one to two years.

At the end of this month, Overture and MSN are slated to revisit their “Search Pane” deal which calls for Overture to provide results that appear in queries in the Internet Explorer navigation bar. In June, the partners agreed to hold off on discussions about the deal as contract negotiations continued.