Non-GAAP net income (net income before discontinued operations and excluding stock based compensation) for the fourth quarter of 2010 was $0.2 million compared to a non-GAAP net loss of $0.7 million in the fourth quarter of 2009. Non-GAAP net income for the third quarter of 2010 was $0.9 million.
An explanation of LookSmart's use of non-GAAP financial measures, including the limitations of such measures relative to GAAP measures and reconciliation between GAAP and non-GAAP measures where appropriate, is included later in this release.
Capital expenditures, including capitalization of internally developed software, in the fourth quarter of 2010 were $0.3 million, compared to $0.7 million in the fourth quarter of 2009, and $0.2 million in the third quarter of 2010. Depreciation and amortization from continuing operations in the fourth quarter of 2010 was $0.7 million, flat compared the fourth quarter of 2009 and the third quarter of 2010.
The Company ended the year with $26.9 million in cash, cash equivalents, and investments, compared to $27.7 million at December 31, 2009 and $26.8 million at September 30, 2010. Net cash provided by operating activities for the three months ended December 31, 2010 was approximately $0.7 million.
Q4 2010 Key Metrics Performance
- Total paid clicks for the fourth quarter of 2010 were 145 million, compared to 243 million for the fourth quarter of 2009 and 175 million for the third quarter of 2010.
- Average Advertising Network revenue per click (RPC) for the fourth quarter of 2010 was $0.065, an increase from $0.049 in the fourth quarter of 2009 and $0.059 in the third quarter of 2010.
- Traffic acquisition costs (TAC) for LookSmart's Ad Network decreased to 58.2% from 67.3% in the fourth quarter of 2009, and increased from 56.9% in the third quarter of 2010.
On January 7, 2011, the Board of Directors of the Company approved a plan of termination that resulted in a reduction in its workforce of approximately 20 full-time positions, or approximately 35%. The Company will record $0.9 million in pre-tax restructuring charges in the first quarter of 2011. The cash payments associated with the restructuring liability are expected to be paid through the third quarter of 2011.