Move, Inc. — which manages Realtor.com and Top Producer — announced their first quarter results last week. While revenue was challenged b
ecause of the real estate downturn, the company has done a solid job of executing on cost containment measures, which helped drive $6.6 million of EBITDA in the quarter. EBITDA in the fourth quarter was $7.3 million.
A driver in the revenue decline is advertising fatigue among even larger real estate agents.
While we’ve been successful in marketing primarily to highly productive realtors, those with more than ten listings per year, we’re starting to see a portion of that group in certain markets struggle to maintain their advertising spend. In spite of the bad news in the media about residential real estate, there’s still an expectation that $4.6 million resale transactions will occur in 2009.
The earnings call was notable for the picture new CEO Steve Berkowtiz painted of the strategy for Move’s future strategy and product development. The approach is based on a broadened perspective of the value chain in the business.
Real estate transactions are large and complex and they entail multiple information sources and usually a large financial consideration. These facts create an important need to have an informed professional helping the consumer through the process. We believe it’s imperative that we play a significant role in sides of this equation for the consumer, the real estate professional, and other advertisers in this chain. In fact, I think one of the most underleveraged aspects of our business and consequently one of our most under-appreciated aspects of our story is our unique ability to assist this value chain in both the B to C and the B to B to C relationship.
Looking at the company’s assets, Berkowitz signals there is opportunity in greater integration of the different applications.
We’ve not integrated our assets the way they should be. Like better integration of Top Producer, our B to B to C offering with Realtor.com our consumer offering. We need to make better use of our ability to sell locally to drive greater national reach. We can roll out a national program and instantly bring it to local markets in a very powerful way at the capability that we’re not fully leveraging today.
What do they need to do better? Leverage their market strength into real market leadership.
Now, within this list of assets and challenges, there’s good news and bad news. The bad news is that despite our clear preponderance in assets, we’ve not always been the thought leader in our space and we’ve not taken the market opportunity to its fullest potential.
The good news is that no one else has either. Move has to lead this market. We have to take our current leadership position and define where this market will go and how it will evolve over time.
The marketing paradigm needs to move past listings into the entire home owner experience, he says.
Let me elaborate on that last point on what I mean by all properties. We’ve done a good job focusing on the 5 million plus homes that are actually transacted every year and connected to universe of consumers who might be considering buying or selling in the immediate future. But any good marketing person can tell you that the key to successful customer acquisition is to expand your reach further and further up and down the value chain all the way to the consumers who may not need your services today, but might need them in the future.
There are more than 100 million properties in the United States. Home ownership is not a process; it’s a central piece of a person’s life. A person’s home is usually the center of their social sphere. It defines who their neighbors are, where their kids go to school, where they shop or go out to eat, who their friends are, and many, many more daily interactions.
For someone who’s not planning on moving soon, they also care about their property values, taxes, relative news and content, and everything else that impacts their home and their community. Move should be the company to serve all of these consumer needs and by doing so, we should be providing even greater value to our real estate professional and advertising partners.
What will that mean? More content from more sources. A focus on creating a networked relationships with homeowners, where they stake ownership of their home and it becomes to center of a series of other connections.
These approaches exist at other real estate sites, like Zillow and Trulia and myriad other resources online. It will be interesting to see what kind of conusmer-focused services Move rolls out, and the degree to which consumers are interested in engaging on a broader scale.
The comlete transcript is here: Move, Inc. Q1 2009 Earnings Call Transcript — Seeking Alpha.
