Until now
But its paid staff has had a hard time keeping up with the volunteers of the Open Directory Project (ODP), a free directory owned by
LookSmart hopes its $20 million acquisition of
"We feel we already had the best directory, but this is kind of the winning punch," says
Zeal uses an elaborate system of reward points, feedback, ratings and reviews to entice enthusiasts--called Zealots, of course--to add new sites to the directory, fix broken Web addresses and write helpful descriptions. Zeal won't disclose how many volunteer editors work on the site.
With the exceptions of
And volunteer editors help keep costs down, which LookSmart will no doubt appreciate in the face of a red income statement. The company believes volunteers will want to contribute to LookSmart's for-profit directory because of the widespread reach of the listings, thought to be available to 80% of Internet users.
LookSmart charges $80 for a general listing in its directory and $200 for a listing that can be added in 48 hours. "Private label" directory Yahoo! charges $200 for listings in its Business Express program. Listings for hobbyist sites are free but take months to get updated. The ODP, by contrast, doesn't charge a penny for listings.
LookSmart leases its directory to some 400 partners, including AltaVista, iWon,
Promoting volunteerism may be smart business, but there are inevitable worries about quality control.
"The Web provides a certain level of anonymity, so often that behavior is less responsible than what you might see in the real world," says Brian Goler, a Zeal co-founder. The site keeps a record of every Web site a user submits, rates and reviews. An internal feedback system--similar to the one Web auctioneer
"It creates the equivalent of a reputation in the real world," Goler says.
LookSmart and the ODP are neck-and-neck right now; both have about 2 million listed Web addresses. Nonetheless, the ODP has a huge head start on LookSmart in the community directory space, and has a wide reach of its own.
"I don't know if they can overtake [the Open Directory Project]. Even with the technology and the review process, it's not the same as having thousands of volunteers," says Safa Rashtchy, a senior analyst at US Bancorp Piper Jaffray.
Rashtchy points out, though, that editors often drop out of community-edited directories. The Zeal system, with pointed incentives for upkeep and additions to the site, may diminish the impact of that problem.
So the acquisition looks smart. But with the company's stock off $70 since a March high, it remains to be seen if Wall Street can recover its zeal for content sites in general, and for LookSmart in particular.