It seems like a great discovery at first. With sponsored Internet search listings becoming such a booming business these days, one figures that the Google coattails would be long and wide enough to drag the entire sector to promised riches. Naturally, the trend's beneficiaries like Yahoo!'s (NASDAQ:YHOO) Overture, Stocks 2004 recommendation (NASDAQ:FWHT), and Ask Jeeves (NASDAQ:ASKJ) haven't been freeloaders. They have delivered the goods in impressive fashion.

However, then you stumble across a pure play in this dynamic hotbed like LookSmart (NASDAQ:LOOK), trading for just a couple of bucks, and you might find yourself rubbing your eyes as the Pavlovian drool kicks in.

Can it be? No. It can't.

This morning, LookSmart announced that Teresa Dial would be assuming the role of chair of the board when company co-founder Evan Thornley retires from that post later this week.

Yes, it's a necessary news release, but it's also one that screams "notice me" at a time when its stock has been left behind from the rallies of its rivals.

The company's uncoupling from the party train happened last year when it lostMicrosoft's (NASDAQ:MSFT) as a partner. With Mr. Softy's online network providing the backdrop for all but a third of the company's revenues, it was easy to see how the company's stock collapsed.

After producing $156 million in revenues last year, LookSmart would be good for no more than $50 million in 2004. That's ugly, but the sector's rising waters seem to be giving this neglected vessel some welcome buoyancy.

Thanks to growth beyond -- both organic and through acquisitions like Web-monitoring specialist NetNanny -- the company is now looking to produce a top-line sum between $76 million and $81 million. Granted, $15 million of that will be the front-heavy result of the now defunct deal, but it's obviously a positive sign.

What isn't so positive is that the company will be cash flow negative over the next several quarters as it produces a loss this year. Its publicly traded competitors are refreshingly profitable. And while LookSmart sports $71.6 million in cash, divide that by a whopping 108 million shares outstanding, and you won't have enough change to break a dollar.

So LookSmart's still got a long way to go before it can hire a tailor for Google's coattails. But a change at the top and a snip at the bottom makes the company worth watching from a comfortable distance as it gets its financial house in order.

Will Google's IPO help scoop LookSmart out of the penny-stock cesspool? What other hot offerings are in the works? Is it safe to buy a new issue? All this and more in the Initial Public Offerings discussion board. Only on

Longtime Fool contributor Rick Aristotle Munarriz has been a vocal fan of the paid-search providers, but he does not own shares in any of the companies mentioned in this story.