Acquisition of Zeal Media Inc

Document date:  Fri 29 Sept 2000
Published:  Fri 29 Sept 2000 09:48:42
Document No:  218872
Document part:  A
Market Flag:  Y
Classification: 

LOOKSMART LIMITED                             2000-09-29  ASX-SIGNAL-G

HOMEX - Sydney                                                        

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LOOKSMART EXTENDS LEADERSHIP IN WEB DIRECTORY PRODUCTS AS FIRST TO
COMBINE PROFESSIONAL EDITORIAL, PROPRIETARY TECHNOLOGIES AND
COMMUNITY INVOLVEMENT

LookSmart (Nasdaq: LOOK), the global leader in Web directories, today
announced the acquisition of Zeal Media, Inc, the leader in community
directory technology. Zeal's technology allows active members
("Zealots") to submit and publish categorized descriptions of Web
sites. The acquisition extends LookSmart's leadership in Web
directories, creating the first integration of professional
editorial, proprietary technologies and community involvement.

Through this acquisition, LookSmart expects to rapidly increase the
scale of its directory, outpacing competitors and maintaining its
leadership in quality while keeping cost structures flat. The
contributions of Zeal's community will be integrated into the
LookSmart directory and maintained and supported by LookSmart's
professional editorial team, maximizing the benefits of Zeal's next
generation technology and vibrant community of Zealots, Zeal's
technology platform will be used to develop reviews of non-commercial
Web sites for LookSmart's directory.

"LookSmart's strategy is to be the ubiquitous directory for all of
the Internet by offering partners superior products and
monetization," said Evan Thornley, chairman and chief executive
officer of LookSmart. "The acquisition of Zeal dramatically extends
our leadership in directory products. Zeal's technology recognizes
the power of community involvement while overcoming the pitfalls
associated with community directories."

LookSmart is the world's largest professionally edited directory with
over 2 million URLs organized into 200,000 categories. LookSmart is
committed to editorial integrity and does not receive payment for
preferred placement in its directories, nor does it accept porn, hate
or spam in its directories. With over 250 editors representing 100
nationalities, LookSmart provides locally relevant, culturally-
sensitive content for 28 countries in 13 languages.

"We are combining the best professional editorial team on the
Internet with the passion and knowledge of the community at large,"
said Kate Wingerson, editor-in-chief of LookSmart. "Zeal has
developed technologies and processes that empower a self-regulating
community to ensure an objective, comprehensive approach to
organizing Web content. This is a perfect complement to our
professional editorial team."

"This is a great win for the Zeal community and the Web community,"
said Brian Goler, chief executive officer of Zeal. "We are excited
about the prospect of working with LookSmart's vast distribution
network, and demonstrating how the community can help make the best
directory on the Web even better. The Zeal community will now have
the opportunity to publish for and draw new members from LookSmart's
network, reaching more than 4 of 5 US Internet users."

Zeal's founders, Brian Goler and Kevin Berk will be joining LookSmart
as vice presidents, and will be leading LookSmart's community
efforts. Zeal will be relocating to San Francisco.

Under the terms of the agreement, approximately 1.4 million shares of
LookSmart common stock will be exchanged for all outstanding shares,
options and warrants of Zeal. Based on the average of LookSmart's
closing price during the ten trading days prior to the execution of
the agreement, the all-stock transaction has an aggregate value of
approximately $20 million. LookSmart expects to account for the
transaction under the purchase method of accounting. The transaction
is expected to close in the quarter ending December 31, 2000.

ABOUT ZEAL

Zeal is the leading community-driven directory technology featuring
Web site ratings and reviews. The Zeal Web directory provides tools
that make it easy for people to share their knowledge, passion, and
experience. The directory is compiled, edited, and enhanced by the
Zeal community, and every member has the opportunity to rate, review,
and submit new sites to the directory. Zeal was founded in 1999 by
Brian Goler and Kevin Berk, and is based in Culver City, California.
More information about Zeal can be found on the company's Web site at
http:/www.zeal.com.

Contact:
 Kathryn Shantz 
 415/348-7104 
 kshantz@looksmart.net