Move.com is the 10,000 pound gorilla in the real estate internet market, and the long-time player has been making a number of changes under the leadership of new CEO Steve Berkowitz. The company’s quarterly earnings call is a good opportunity to check in with the direction of their strategy and to assess the potential impact.
First, Berkowitz shared the scale of activity across the Move platform in the second quarter of this year:
We averaged 10.8 million average unique users per month in the quarter which is more than 50% greater than our nearest competitor and more than triple any other companies. We averaged 247 million minutes of user engagement per month in the quarter which is five times our nearest competitor and 40% greater than the combined traffic of all our major competitors; Yahoo, Aol, MSN, Trulio, Rent.com and Zillow. We averaged more than 300 million page views per month this quarter which is about six times any other competitor in our space.
In response to a question, Berkowitz shared that the most important metric the company is watching is Consumer Engagement.
What we are seeing is really interesting. If you look at home sales they are flat and if you look at where they are coming from it depends who you ask. A significant number are coming from foreclosures. If you kind of look at the market place what we are seeing, and this is kind of why we are focused on the engagement number and the page views number is that we are seeing a lot of people engaging more. They are doing more shopping. They are doing more comparison shipping. They are spending more time looking rather than buying. It is no different than a lot of what is happening in retail in a lot of stores where the high end stores people are walking through the store and shopping but they are not buying.
I think that to me is ultimately over time if we are going to be able to get those kinds of statistics and we are learning about them ourselves inside of the business, or I am anyway. Hopefully we are going to be able to give you more color on those kinds of things going forward at some point. Just earlier Rob talked more about how realtors are generating revenue. Those are things we are learning about and are going to help us guide the business in terms of the plans that we have going forward. I would focus on engagement and page views as well as the order of the engagement, page views and unique users.
Move’s product focus is centered on search and content, Berkowitz said.
In terms of key product areas, we have put a high priority on search and content. We have begun testing new search capabilities that will significantly improve our search functionality and dramatically improve the user experience. These initiatives will reset the bar higher for other companies trying to deliver a valuable experience for both the real estate consumer and professional. We plan to launch portions of the new search capability in the second half of the year.
We have also increased our investment in content, focused on relationships with the MLS’ to utilize more sold data and explore new opportunities with our existing capabilities such as find home values which currently allows consumers to see home values in detail in relationship to other properties on the street, in the neighborhood and in the town.
While these developments while drive future performance, the company has faced the same challenges as everyone else in the real estate market in terms of revenue performance.
Revenue declined 11% compared to Q2 2008 and was a result of a decline in each of our businesses with Realtor.com and Top Producer being down just slightly but New Homes and Media were down 56% and 22% respectively. We are not going to predict when the housing or advertising markets will recover. However, we did see our first sequential increase in media revenue since the second quarter 2008 and total new subscriptions to Top Producer grew in the quarter which hasn’t happened in over a year.
Move’s service revenue base has been fairly resilient during the downturn, and the listing enhancement revenue supporting Realtor.com appears to have stayed steady.
The question remains as to what economic benefit follows from consolidating a large segment of consumer traffic. Beating the competition in page views by an order of magnitude of six doesn’t seem to have driven the top line by the same amount. The online real estate market is highly fragmented and no single player is able to deliver a dominant marketing footprint. The question around Move’s strategy is whether building a broad base of content beyond the listing generates a further multiple of audience, allowing it to render other listing aggregators inconsequential. I can’t think of any market where information has been commoditized and then the marketplace has subsequently consolidated. Any thoughts?
