Industry News

New biz models poised for growth in 2005

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The success of online real estate brokerage ZipRealty's initial public offering has buoyed other companies with alternative business models, boosting their optimism about prospects for 2005. ZipRealty, a full-service brokerage that rebates part of its sales commission to home buyers and sellers, made its IPO of 4.55 million shares of common stock at $13 per share in November. Net proceeds totaled $61.3 million, higher than the company originally predicted. ZipRealty's stock also has continued to do well since its IPO, trading between $14 and $19 a share in the first month. "We are just in shock – there's no other word for it – at the success of their IPO," said Lyle Martin, co-founder of Assist-2-Sell, which sells houses for a flat fee. "It just demonstrates there is public support of an alternative model and that the investors apparently see that as a trend in the future. Otherwise, why would they risk their money on the stock? It lends credibility to the idea...