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LookSmart Class Action Lawsuit Settlement Proposed

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A proposed settlement to a 2002 class action lawsuit against LookSmart will compensate customers who were required to accept a new commercial listings agreement to maintain inclusion in LookSmart's directory.

The suit, filed in the Superior Court of California, San Francisco County, claimed breach of contract, fraudulent business practices and misleading advertising.

In April 2002, LookSmart moved thousands of companies that previously had paid a one-time submission fee into a new cost-per-click listing program. Companies that didn't sign up for the new system risked de-listing from LookSmart's database.

At the time of the suit, Robert Goldberg LookSmart's senior vice president of sales and marketing told Search Engine Watch, "We believe suit is incredibly baseless. We're going to defend it vigorously. We feel we are in a very strong legal position."

The plaintiffs decided to accept the proposed settlement for a number of reasons. The proposed settlement states: "The Class Representatives and Class Counsel believe that the claims asserted in the litigation have merit. However, Class Counsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the litigation against the Defendant through trial and through appeals."

You are a member of the settlement class and are covered by the settlement if you paid LookSmart a fee for review of your listing between May 13, 1998 and April 9, 2002, and your listing was accepted by the company.

Terms of the settlement call for a combination of free monthly clicks and a cash payment to be made to each member of the settlement class. The terms vary based on when payments for review were made to LookSmart.

Class members needn't do anything to receive free clicks. However, to receive a cash refund of up to $50.00, you must complete and submit a claim form no later than November 14, 2003.

A hearing will be held on October 31, 2003 in the Superior Court of California for the County of San Francisco to finalize the terms of the settlement.

LookSmart Hit With Potential Class Action Lawsuit Over Submission Program
The Search Engine Report, June 3, 2002
http://searchenginewatch.com/sereport/article.php/2164821

A proposed class action lawsuit claiming breach of contract, fraudulent business practices and misleading advertising has been filed against LookSmart over a recent change in how the company sells some of its commercial web site listings.

Legal Staffing Partners v. LookSmart
http://searchenginewatch.com/sereport/02/06-text.html

Text of the lawsuit filed by Legal Staffing Partners against LookSmart.

LookSmart Changes To Cost-Per-Click Listings
The Search Engine Report, May 6, 2002
http://searchenginewatch.com/sereport/02/05-looksmart.html

Pay -- and keep paying -- or don't appear, LookSmart told existing and new listing customers in April, in a significant change to how the human-powered search engine lists web pages from commercial web sites. A full rundown on the changes.

Is the settlement fair? Take a look at some of the discussions going on in the forums listed below to see what the webmaster community has to say. We'll link to additional discussions in Friday's Search Engine Forums Spotlight issue.

LookSmart Settles Lawsuit
Best Practices Forums

"Nice to see them have to acknowledge their huge blunder. Seems they will have to pay through the nose for it - legal costs alone are going to cost them $600,000!"

Looksmart Settles Class Action
High Rankings Forum

"They're already giving all those free clicks. And in some cases it's LESS than what they're giving now. Plus it will now end in Dec!"

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