Under the deal, LookSmart will develop "Subsite Listings" that will let people search Amazon product categories such as books, music, videos and DVDs as well as its consumer electronics and software products stores. Consumers who type in a keyword to search for a product will be provided with a link to the site that sells the product rather than to the home page of Amazon.
LookSmart said that Amazon will be paying it to provide the service.
"The Amazon deal is a strong validation of LookSmart's Subsite Listings program, which is critical to LookSmart's long-term strategy," said Justin Baldauf, equity research analyst at Merrill Lynch.
LookSmart shares rose about 16 percent following the announcement. Amazon shares also climbed Wednesday.
The announcement comes shortly after LookSmart cut its work force by 31 percent, or 172 employees. Tony Mamone, vice president of listings services, said the company is restructuring in an effort to focus on areas such as listings services.
"LookSmart is highly focused on developing marketing products for our clients that both work for a user experience stance perspective and also for the client and the merchant," Mamone added. "We're allowing (consumers) to get to that information quicker than they could have before."
Amazon also expects LookSmart's service to make customer searches easier.
"Amazon.com strives to be the e-commerce destination where consumers can find and discover anything they want to buy online," Owen Van Natta, the company's vice president of business development, said in a statement. "LookSmart Subsite Listings?help make it easier for customers to find exactly what they are looking for."
LookSmart provides directory listings to sites and companies including Microsoft's MSN, Netscape Netcenter, AltaVista, Excite@Home, Time Warner, Sony and Qwest Communications International.