Real estate lead generation and management company Market Leader Inc. said it finished the second quarter with a $3.1 million net loss as it continued to transition away from selling leads generated by sites like in favor of providing customized websites and tools for agents and brokers.

Despite trimming losses by 9.3 percent from the first quarter to the second, Market Leader’s $6.58 million loss for the first half of 2010 represented an 11.7 percent increase from the same period a year ago.

Formerly known as HouseValues Inc., the Kirkland, Wash.-based company relied on portals such as, and to generate most of the leads it provides to real estate agents.

The company changed its name in 2008 and began a transition to a business based around providing personalized websites for real estate agents and brokers with integrated lead generation and customer relationship management tools.

Market Leader said revenue from its new "Vision" products — including Growth Leader for real estate agents and RealtyGenerator for brokerages — grew by $200,000 from the first quarter to the second, to $3.4 million, accounting for 58 percent of total revenue.

Growth in Vision revenue was up more than 60 percent from a year ago, driven primarily by new customers for Growth Leader, the company said. Average revenue per customer also increased for the fifth consecutive quarter, to $367 per month.

Market Leader said partnerships with franchises helped it sign up more than 100 new brokerage offices and teams to use RealtyGenerator. Those additions had little impact on second-quarter revenue but will improve the company’s bottom line going forward.

Last year Market Leader announced separate agreements to provide RealtyGenerator to brokerages through Realty Executives International and Leading Real Estate Companies of the World. More recently, the company announced a similar agreement with Avalar Network.

Market Leader expects revenue growth in the second half of the year, but warned that increased advertising costs and continued investment in customer acquisition and support are likely to increase third-quarter adjusted losses beyond the $1.6 million loss in earnings before interest, taxes, depreciation and amortization (EBITDA) recorded during the second quarter.

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