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Market Leader boosts revenue but stays in the red

SmarterAgent acquisition helping grow premium subscribers

Market Leader Inc. said it boosted third-quarter revenue by 50 percent from a year ago as more than 3,000 agents and brokerage companies upgraded to its premium services.

The Kirkland, Wash.-based company — which provides marketing tools, websites and lead generation services for real estate agents, brokerages and franchisors — said it was the largest increase in subscribers of premium services in five years.

Although Market Leader’s revenue grew to $9 million in July, August and September, the company reported a net third-quarter loss of $3 million, down from $3.4 million a year ago.

Much of the increase in premium service subscribers was driven by enhancements to products being delivered through the company’s new franchise channel, the company said, made possible by Market Leader’s $1.75 million acquisition of SharperAgent in August.

Market Leader said it plans to integrate SharperAgent’s marketing campaign management tools and design and printing capabilities into all of Market Leader’s premium product offerings.

Market Leader has a five-year agreement with Keller Williams Realty to provide the lead management, contact management and marketing design components of Keller Williams’ eEdge platform for agents.

Market Leader has disclosed that it will receive a minimum of $10 million from Keller Williams over the life of the contract, but can earn additional revenue by "upselling" premium services to the franchisor’s 80,000 agents.

Keller Williams agents pay the franchise $15 a month for eEdge, which launched in January, and have the option of upgrading to Market Leader Professional Edition for $99 a month.

Market Leader also said it expects to recoup its $8.25 million investment to acquire in September within three years or less through reduced lead generation expenses. Market Leader also acquired mobile lead generation platform developer kwkly this year.

Based on "the strong momentum in the business," Market Leader advised investors that it expects to achieve positive adjusted earnings before interest, taxes, depreciation and amortization by the end of the first half of 2012. 

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