Move Inc. officials said Tuesday that they expect a new “transformational” venture — spearheaded by former Realtor.com president Allan Dalton and outgoing National Association of Realtors chief economist David Lereah — to cost about $6 million in net expenses and to generate some revenue this year, but offered no specifics about the project.
This effort is scheduled to launch in August and is expected be a new “engine of growth” for the company, said Move CEO Mike Long during a first-quarter earnings announcement. He also referred to the veiled project as a “high-potential new venture that is not yet in the marketplace,” adding that the company wouldn’t be discussing the project at all if it didn’t involve such prominent industry figures as Dalton and Lereah.
Separate development projects are focusing on upgrades to Move’s search sites, including the National Association of Realtors-affiliated Realtor.com site. Internally, Long said the effort is referred to as the “America’s on the Move” project, and the core of the strategy is in building the “most comprehensive information around the real estate experience,” which goes beyond amassing property listings and includes community content, social networking and home improvement information in one place.
The Realtor.com upgrades focus on “enhancing the site’s underlying technology and design,” he said. “We are not content to rely upon the power of this brand nor our distinct listings advantage.” The new version of the site is expected to launch this quarter.
Also Tuesday, Move officials announced the hire of Lorna Borenstein, a Yahoo executive, as Move Inc. president. She will report directly to Long and will lead day-to-day business operations, engineering, marketing and product development for the company.
Borenstein has served as a vice president for Yahoo’s strategy on youth and education, global vice president and general manager of Yahoo Personals and as vice president of marketing for Yahoo’s Search and Marketplace Group. Before joining Yahoo she served as vice president and general manager for eBay and served as assistant counsel at Hewlett-Packard Canada Ltd.
“As the leader in the emerging online real estate media category, Move is extremely well-positioned to capitalize on one of the largest advertising markets that is just beginning to shift its spend online,” Borenstein said in a statement.
The company announced net income applicable to common stockholders of $163,000 in the first quarter, which compares to a net loss of $2.3 million in first-quarter 2006. Total revenue in the first quarter was $71 million, up 3 percent compared to $69 million in first-quarter 2006.
Move’s earnings before interest, taxes, depreciation and amortization, or EBITDA, was $7.1 million in the first quarter, compared with $3.9 million in first-quarter 2006.
While Realtor.com has been a core revenue driver for Move, the company’s rental and new-home search operations have struggled in the transition from a subscription-based model paid-inclusion model of advertising to a cost-per-click model, Move Inc. officials said.
Lew Belote, Move’s chief financial officer, said that more brokers are paying for enhanced listings placement at the Realtor.com site, with over 2,000 companies representing about 170,000 agents participating. Meanwhile, the acceptance of the new business model for the new-homes and rental search site has been slower than expected.
Long said that Move is planning a major advertising campaign to promote its Realtor.com and Move.com search sites, and is partnering with the National Association of Realtors in its promotion of Realtor.com.
Move is planning to lower some of its advertising costs in an effort to attract more so-called “second-tier Realtors,” the newcomers and non-top-producing agents who typically have lower marketing budgets. “We think we may stimulate demand by lowering pricing,” Long said. “The changes we’re making in Realtor.com we think will actually increase audience … will increase recurring use of the site.”
Move’s stock price per share ended the day at $4.70 on Tuesday, up 6 cents from the previous day’s close.