Online Advertising Agreement - Sample Document

EXHIBIT 10.53

PRIORITIZED LISTINGS SYNDICATION AGREEMENT

THIS PRIORITIZED LISTINGS SYNDICATION AGREEMENT (the “ Agreement ”), made as of August 21, 2001 (the “ Effective Date ”), is made by and between LookSmart, Ltd., a Delaware corporation (“ LookSmart ”), and Search123 Inc., a California corporation (“Search123”) (each, a “ Party ”, or collectively referred to as the “ Parties ”).

WHEREAS, Search123 is the owner and provider of a cost-per-click search engine (the “ Search123 Service ”);

WHEREAS, LookSmart is the owner of an Internet search and directory service which includes the ability to search the Internet for relevant content by typing a word or set of words into a search box (the “ LookSmart Service ”);

WHEREAS, the Parties desire to offer LookSmart Service as an integrated component of the Search123 Service;

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Integration of LookSmart Service into Search123 Service .

1.1. Definitions .

“ LookSmart Search Results ” means a set of Prioritized Listings provided by LookSmart from its proprietary database in response to an Internet user’s keyword search query on the Search123 Service. The LookSmart Search Results, when integrated into the Search123 Service, will appear on the Search123 service search results, including the Search123 Site and Search123 Affiliate Sites, substantially as shown in Exhibit A attached hereto (which depicts the results on the Search123 Site and representative Search123 Affiliate sites).

“ Search123 Affiliate ” shall mean the web site operators who distribute the Search123 Service or refer Internet users to the Search123 Service.

“ Search123 Affiliate Site ” shall mean the default Internet home page or primary search functionality of Search123 Affiliates.

“ Search123 Site ” shall mean the default Internet home page that is accessed by Search123 subscribers or other Internet users and is located at www.Search123.com .

“ Destination Page ” means the LookSmart customer’s web page accessed by clicking on a Prioritized Listing.

“ Prioritized Listing ” means a text-based site title, description (maximum 255 characters, including spaces) and URL hyperlink (with tracking code) which is drawn from the LookSmart database of Prioritized Listings in response to a keyword search query.

“ Referral ” occurs when a bona fide Internet user (which excludes a robot, spider, software, scraper or other mechanical, artificial or fraudulent means) clicks through on a Prioritized Listing and accesses a Destination Page. LookSmart will identify Referrals by means of a “come from tag” in the URL hyperlink from Prioritized Listings. For the avoidance of doubt, no Referral will occur unless the Destination Page is fully served to the end-user’s browser.

2. Integration. LookSmart will provide the LookSmart Search Results in response to a user’s keyword search query via a text-based data feed, or other mutually agreed method, from the LookSmart database. The web pages containing LookSmart Search Results will be served and hosted by Search123, provided that Search123 shall serve the LookSmart Search Results in the order presented to Search123 by LookSmart. The database and search algorithm (and any modifications thereto during the Term) used to generate the LookSmart Search Results are proprietary to LookSmart and shall remain entirely within LookSmart’s control. All Prioritized Listings returned by LookSmart in response to a search query shall in all cases be included by Search123 (a) in the order provided by LookSmart and (b) in order of prominence relative to other Search123 results based on the price that LookSmart is paying Search123 for such queries based on the previous month’s searches as specified in Section 3. If a user’s search query does not result in any match(es) with search results from the LookSmart database, then no LookSmart Search Results will be displayed on the search results page. LookSmart retains the right to modify the appearance and content of the LookSmart Search Results, as well as the underlying database and search algorithm, so long as the modifications do not substantially change the location and layout described in this paragraph. Search123 will complete integration and launch the Prioritized Listings no later than August 30, 2001, 2001, provided that Search123 is given all necessary resources and assistance by LookSmart within 10 days of such date.

3. Fees and Payment. LookSmart shall pay to Search123 a specified amount per Referral on a monthly basis based on the volume of Referrals Search123 generates, as follows:

LookSmart will make such payments to Search123 within 30 days after the end of calendar month.

4. Responsibility for LookSmart Search Results. LookSmart will be solely responsible for the generation and collection of revenue from advertising or sponsorships on the LookSmart Search Results, and shall have sole responsibility for building the Prioritized Listings database and delivery of the LookSmart Search Results to Search123. LookSmart shall retain sole discretion as to the location, type and content of advertising served on the LookSmart Search Results.

5. Reporting and User Data.

5.1 Monthly Traffic Reports. LookSmart shall provide to Search123 monthly Referral summaries within 30 days following the end of each month detailing the number of

Referrals and the revenue generated in the corresponding month (“ Traffic Reports ”). LookSmart’s determination of the number of Referrals during any period shall be dispositive, unless there is a ten (10%) or greater discrepancy between the numbers reported by the parties, in which case the parties will promptly meet and work together in good faith to determine the cause of the discrepancy. Once a discrepancy is identified, the Parties will make any necessary adjustments at the time of the next payment.

5.2. Books & Records; Auditing. During the Term of this Agreement and for a period of six months thereafter, the Parties will each maintain accurate and complete books and records, including copies of all customer and other correspondence, relating to such Party’s performance of its obligations under this Agreement. Each Party will have the right, no more than once in any twelve (12) month period during the Term, to audit the other Party’s books and records which are relevant to the performance of its obligations under this Agreement upon ten (10) days’ prior written notice. Such audits will be performed by the auditing Party’s representatives and will be conducted during normal business hours. Costs for such audits will be paid for by the auditing Party, unless the results of the audit show a shortfall in any payment owed or paid to Search123 during the period covered by the audit exceeding ten percent (10%), in which case the reasonable costs for the audit will be paid by LookSmart.

5.3. Traffic Increases; Affiliate Distribution.

a) Search123 will provide LookSmart with 30 days prior written notice (or as soon as possible if implementation is completed in less than 30 days) before launching the Search123 Service with new affiliates or traffic sources that will, in Search123’s reasonable opinion, increase the number of monthly Referrals by the greater of (i) 30% or more over then-current levels or (ii) increase the total monthly Referrals to over two million Referrals per month. Notice shall include the proposed time frame for launching the LookSmart Search Results and Search123’s reasonable estimate of the likely increase in traffic on a monthly basis during the remainder of the Term. LookSmart will have no obligation to pay for Referrals for which a timely notice is not provided under this section. LookSmart reserves the right, upon written notice to Search123, to refuse to allow distribution, sublicensing and syndication of the LookSmart Search Results on the particular affiliate or traffic source, in its sole discretion.

b) Upon LookSmart’s request, Search123 will make commercially reasonable effort to offer reporting of affiliate traffic to allow LookSmart to determine the performance of Prioritized Listings on the Search123 and Search123 Affiliate Sites.

6. Licenses.

6.1. Trademark License . During the Term of this Agreement, each party hereby grants to the other party a non-exclusive, non-sub-licensable, non-transferable, royalty-free right and license (the “ Trademark License ”) to use, display and reproduce such party’s name, logo, trademarks and service marks (the “ Trademarks ”), solely for the purposes of displaying and maintaining the LookSmart Service and Search123 Service as set forth in this Agreement. Each party acknowledges that the other party’s Trademark is and will remain the exclusive property of such party and all use by each party of any Trademark will inure solely to the benefit of the

owning party. Neither this Agreement nor any rights granted hereunder will operate as a transfer of any rights in or to any Trademark, except for the limited rights expressly granted under this Agreement. No party will take any action that would undermine, conflict with, or be contrary to the intellectual property rights and interest of the other party, including, without limitation, any use of, or attempt to register, any trademark, service mark or trade name substantially similar to any other party’s Trademark.

6.2. Database License . During the Term of this Agreement and subject to the terms hereof, LookSmart hereby grants to Search123 a royalty free, non-transferable, non-exclusive license, to (i) use, transmit, integrate, display and distribute the LookSmart Search Results (the “ Content ”) via the Search123 Service, to Internet end-users on the Search123 Site, and (ii) subject to Section 5.3 above, sublicense the Content to Search123 Affiliate Sites, provided that such Search123 Affiliates shall enter into a written contract with Search123 by which the same license and trademark limitations and restrictions are placed on Search123 Affiliates as are placed hereby on Search123. Search123 shall not allow any of the Content to be used, disclosed to or shared with any Search123 related entities, except in accordance with the terms hereof. The rights granted by LookSmart hereunder, including without limitation the license regarding the Content, are limited to the display and distribution as part of the Search123 Service directed primarily at Internet end-users in North America. LookSmart grants no license for any such services directed primarily at Internet end-users outside North America.

6.3. Content and Data Ownership . LookSmart shall retain all right, title and interest in and to the LookSmart directory, database, algorithm and related technology, and all traffic data collected under this Agreement. LookSmart will retain all right, title and interest in and to the intellectual property included in the Content (including, but not limited to, ownership of all copyrights an