Search player LookSmart has taken a significant step forward on what it expects to be its comeback trail, launching 161 new vertical search sites.

The move came as the company announced a third quarter net loss of $4.3 million, which was better than the $5.5 to $6.5 million loss it expected when it last reported earnings. Revenues for the quarter were $9.2 million, higher than the $7 million to $8 million it had predicted but lower than the $10.2 million in brought in last quarter.

LookSmart has been fighting for its life since losing MSN as a distribution partner back in 2003. Since that time, when its main products were paid inclusion listings, the company has made cutbacks, shaken up its management and refocused around three initiatives -- a paid search and contextual ad network, vertical search sites, and technology licensing.

"We've gone from a company that everyone had all but written off, to a company where no one is saying our success is assured -- including ourselves mind you -- but they're saying that maybe we can build an audience," CEO Dave Hills told ClickZ News.

The company unveiled a large piece of its vertical search strategy Thursday, launching 161 vertical search sites in 12 categories including automotive, cities, food, health, home, sports and travel. It had previously built 20 vertical sites in the education and money categories as part of the same effort. The model of a vast array of topic-specific sites is similar to what Hills oversaw when he was COO and president of sales at About, but, in the LookSmart case, the content is brought together technologically rather than by human editors.

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