LookSmart is a global Internet search infrastructure company. LookSmart creates highly targeted online marketing products for its customers by matching the users' need for relevant search results with the onlinemarketer's need for effective targeting. LookSmart creates a range ofdirectory listings and search targeted advertising products that aredistributed through its search infrastructure platform through leadingInternet portals ISPs and media companies. LookSmart Ltd. has a market cap of $21.9 million; its shares were traded at around $1.2833 with and P/S ratio of 0.3.
Highlight of Business Operations:We continue to be dependent upon a few customers for a significant percentage of our revenue. For the three months ended March 31, 2009, two customers accounted for a combined 30% of revenue and for the three months ended March 31, 2008, one customer accounted for 22% of revenue. For the quarter ended March 31, 2009, IAC Search and Media (IAC) represented $2.7 million, or 20%, of total revenue and $1.1 million, or 89%, of the Publisher Solutions revenue. Our contract with IAC expires December 31, 2009. IAC is currently soliciting bids for a new contract and we are actively participating in the process.
We recognized $12.0 million of Advertiser Networks revenue during the three months ended March 31, 2009, down 24% from the $15.8 million recognized during the three months ended March 31, 2008. Revenue from Advertiser Networks decreased in the first quarter of 2009 by $3.8 million compared to the same period in 2008 primarily as a result of a decrease in average revenue per click (RPC) which was partially offset by an increase in paid clicks. RPC decreased to $0.07 from $0.10 in the first quarter of 2009 as compared to 2008 reflecting the continued shift in the channels used to reach search advertiser network customers and the segment composition of search advertiser network customers. Paid clicks totaled 184 million for first quarter of 2009 as compared to 152 million for the first quarter of 2008, an increase of 21%, but a 9% decrease from the 201 million paid clicks for the fourth quarter of 2008. The increased paid click volume is attributed to an increase in advertisers, improvements in quality of our platform, performance optimization and better match rates.
We recognized $1.2 million of Publisher Solutions revenue during the three months ended March 31, 2009, a 29% decrease from the $1.7 million recognized during the three months ended March 31, 2008. IAC represented 89% and 83% of Publisher Solutions revenue for the three months ended March 31, 2009 and 2008, respectively. Publisher Solutions revenue decreased $0.5 million in the first quarter of 2009 as compared to the same period of 2008 primarily due to reduced revenue from IAC resulting from a contractual reduction of the revenue share percentage in the final year of the contract.
Our TAC during the three months ended March 31, 2009 were $7.6 million, down $2.1 million, or 22% from the $9.7 million in the three months ended March 31, 2008. As a percentage of Advertising Network revenue, TAC increased approximately two percentage points from 61.5% in first quarter of 2008 to 63.1% in the first quarter of 2009. These changes are primarily due to the reduced Advertiser Network revenue combined with our network quality enhancement initiatives.
Consistent with the reasons revenue and cost of revenue decreased in the first quarter of 2009 as compared to the first quarter of 2008, gross profit declined approximately 3 percentage points to 39% for the first quarter of 2009 versus 42% for the same quarter in 2008 and gross profit, in absolute dollars, also decreased $2.2 million to $5.2 million.
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