Industry

Friday Flash: Earnings, angst and the home shopping opportunity

Author
Brian Boero
No.
688
Please excuse the mess. This page is currently under construction.

We released a new indicator for Nudge, our marketing app, this week. It communicates the degree to which distressed properties play into local market forces. Check it out.

Many more of these to come.

The public online real estate players reported Q1 results this week.

Here are some quick impressions:

Market Leader (Details)

  • Revenue is up and losses are down. The company has stabilized. I wonder, through, how much of the revenue increase was bought through the acquisition of Sharper Agent and Realestate.com and how much was organic?
  • The company’s strategy is to sell through big franchise channels, and they’re doing well there – lining up Keller Williams, Century 21 and Better Homes and Gardens in the past year. But while the KW deal came with some nice up-front cash, it will be interesting to see if the brand channel has the sales power it used to have.

Zillow (Details)

  • Wow, pretty bitchin’ all the way around. $90M run rate, solid EBITDA, and direct customer relationships with 18,616 agents.
  • Spending roughly half your cash to buy a company like Rent Juice signals maximum confidence in future operating and stock performance (which, incidentally, at the moment of this writing, has cracked $40 for the first time since the IPO spike and fall).
  • The company is positioning the Rent Juice acquisition as a strategic play into the rentals market, which surely it is. But this also strikes me as a move towards more customer share with Realtors, many of whom are trying to expand their practice to rentals in light of market changes. Rent Juice is also a great piece of software – one that could be bent toward more Realtor-focused purposes.

Move (Details)

  • They’re still hanging at that $180M rate, though company projections for the year have it approaching the $200M mark again.
  • The company is seeing growth in new products, and the Top Producer business is stabilizing as new features are released (including a mobile HTML 5 version).
  • It’s hard for a company that has been public for almost 15 years to match the sizzle of the Zillow story, but let’s not forget that Move has many more agent customers than any of their online competitors, far fewer data vulnerabilities, and $95 million in cash.

The GoodLife Team, a small brokerage in Austin, pulled its listings from Trulia.

This company gets the web and is anything but retrograde in its thinking about online advertising. So this move is instructive.

They acted because Trulia placed ads from competing agents on GoodLife Team listings even though The GoodLife Team was a paying Trulia advertiser. That violates my “everyone be cool” approach to syndication, but the Good Life Team’s reasoning was still more principled.

It seems they have a brand standard that requires listing agents to respond to inquiries within five minutes. An agent buying ads on their listings is bound by no such requirement, therefore undermining the standard from the sellers’ point of view. Trulia wasn’t willing to pull the other agents’ ads, so pulling the listings was the only play for the Good Life Team to make.

Straw men and red herrings litter the syndication debate, but I buy the Good Life Team’s position here. Good for them.

In related news, Trulia launched a mobile ad program this week. Makes a lot of sense, and it looks great. But if you thought the tension over ads on the big screen was bad…

This is interesting: 42 Floors, a new commercial real estate search site, released something they’re calling Showroom.

The headline reads, “So you’ve found a great office, we know you’ll need ________”

It’s a small directory, really. But the positioning here is compelling.

A home purchase triggers so much other commerce, yet most real estate sites – including some broker sites – simply throw display ads at this opportunity. What 42 Floors did here suggests more interesting possibilities.

Enjoy the weekend!

[Disclosure: Move, Inc. is a 1000watt client]