Move Inc. losses grow in 2008
Realtor.com operator cut costs, product development
By Inman News, Tuesday, March 3, 2009.Realtor.com operator Move Inc. says the company's losses ballooned from $4 million in 2007 to $32.7 million in 2008, despite having slashed $20 million in annual operating expenses by year's end.
At $242 million, revenue for the year was down 3 percent from 2007. The company saw a sharper 8.2 percent year-over-year drop in revenue during the last three months of 2008, to $57.5 million, that was driven by fewer new-home listings and fewer display ads.
The $3.2 million loss for the quarter was an improvement from the last three months of 2007, when Move lost $5.3 million. Driving the increased losses for 2008 as a whole was a $27.2 million loss on discontinued operations, including Move's Welcome Wagon business, the company said.
Move acquired Welcome Wagon, a lead-generation site that offers consumers information about local businesses and services, in 2001, and hopes to complete a sale of the company by the end of the year. Move took a restructuring charge of $1.6 million and an impairment charge of $16 million related to Welcome Wagon operations in 2008.
Briefing investors for the first time since taking over as Move's chief executive officer six weeks ago (see story), former Ask.com CEO Steve Berkowitz said Realtor.com continues to dominate the industry in Web site traffic and viewer engagement.
After relaunching Realtor.com in 2008 Move begins the new year "positioned to continue our market leadership in online real estate," and with a renewed focus on profitability, Berkowitz said.
Move's cost-cutting measures mean that last year the company spent 24 percent less on product and Web site development than the $34.7 million outlay made in 2007. Expenditures for sales and marketing were up 4 percent, to $93.5 million.
Almost 90 percent of the company's revenue for the year -- $217.2 million -- came from the real estate services segment, which includes Realtor.com and Move's Top Producer applications for Realtors. The segment generated $53 million in profits during 2008, a 12 percent drop from 2007.
Revenue fell by 12.5 percent to $24.8 million in the consumer media segment, which includes advertising products, lead-generation tools, and content sponsorships on Move.com and related sites. The consumer media segment generated $303,000 in profits in 2008, compared with a $1.4 million loss in 2007.
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Submitted by Tony Covey on March 3, 2009 - 6:55pm.
Yes, Move is really pulling in the old purse strings! It only spent $50 million to give Realtor.com a face lift. How thrifty! And the company has already saved $5 million in '09 by firing President Lorna Borenstein. Next thing you know, they'll find a market for those auction rate securities all their capital is tied up in and start making money on corporate online ad sales (the missing peg in Lorna's brilliant 3-Pillar Strategy). Wow, now wouldn't that be something!
P.S. If you believe all this, Have has a little cash sucker called Welcome Wagon they'd love to sell ya. Hold on tight to those rose-colored glasses, Mr. Berkowitz.
Submitted by Marilyn Wilson on March 4, 2009 - 6:06am.
The continued losses at Move, Inc gives me pause for NAR's Realtor Property Resource project. I am worried that the company chosen to build the national property database does not have the capital to make that daunting project a reality. In tough times companies many times pull back from new projects and this could be no exception.
Submitted by Nate Scott on March 4, 2009 - 2:08pm.
Glad to see them failing, they do little or nothing to serve the members of NAR. Keeping the Realtor as the main point of contact isn't thier focus and never has been, and as the site for NAR that should be the main focus - drive consumers to the members.
Submitted by Jon Fitch on March 6, 2009 - 1:53pm.
I just wanted to correct some of the comments that were posted:
1. Move did not spend $50M to update Realtor.com.
2. Regarding the national property database and the posted concerns about Move's capital, Move has more than $100M in cash and short-term investments on hand and Move remains committed to the national property database project.
3. Users to Realtor.com spend more time on site and consume more pages than any other real estate site. There's no other site that comes close to driving as large an audience of engaged home buyers to REALTORS listings than Realtor.com.
Every listings we get from an MLS is posted for free and with the redesign we increased the number of free photos to four.
We offer NAR members a free blog to create and strengthen relationships with existing and hopefully new customers.
We send out millions of emails monthly to our registered users with new listings that meet their criteria. There is no cost to NAR members for this additional exposure for their listings.
Thank you.