Sensis chief executive officer Andrew Day, who announced the deal today, said the LookSmart assets, "which are some of the best search tools in the market," would be used to help drive Sensis towards its goal as "the major player in local Australian advertising and search".
LookSmart was founded in Melbourne in 1996, riding the dot-com boom all the way to listings on the Australian Stock Exchange and the NASDAQ in the U.S. However, the company has been forced to lay off staff and close some operations, including its U.K. based outfit, following the cancellation in October last tear of a vital contract between the company and Microsoft. That deal accounted for 65 per cent of the company's revenues when the plug was pulled.
LookSmart now plans to reduce its headcount, which stood at 429 at the end of the third quarter last year, to "less than 200" by the end of this quarter. It's also searching for a new chief executive following the departure of former CEO Jason Kellerman.
In the meantime, Sydney native Damian Smith will take over the reins until a permanent replacement can be found.
"A number of things have happened in the last few days," Smith told ZDNet Australia by phone from San Francisco. "While the company seeks to find a permanent CEO the board asked me to step in."
The interim chief executive, who insists Kellerman wasn't forced to resign, says the acquisition of LookSmart assets by Sensis was the best deal for shareholders and company employees.
"A significant number of our staff will be transferred to Sensis," he said. "Once that transition to Sensis is complete... there'll be a small number of redundancies. [However], the majority of our staff will transition over to Sensis employment in the next few weeks."
Indeed, the employees of LookSmart seemed to be an incentive for Sensis to snap up the operation. "The deal also allows Sensis access to certain LookSmart employees who are very experienced in the Australian search market," a statement issued by Sensis read.
Sensis, a wholly owned subsidiary of Telstra, operates both the White and Yellow Pages directories, as well as online services such as CitySearch and Whereis.