Despite another quarter’s solid performance from digital real estate holdings at News Corp. — which include realtor.com, operated by News Corp. subsidiary Move, Inc. — the corporation reported a $15 million loss for the first quarter of fiscal year 2017.
News Corp.’s digital real estate segment “is on a clear path to reshape the character” of News Corp., with revenue from the unit — which includes realtor.com operator Move and REA Group — growing significantly in the first quarter of the fiscal year 2017 from the year before, according to News Corp. CEO Robert Thomson.
“New products and pricing” for the division (including a new version of realtor.com’s listing ad product) are slated for launch, he said in an earnings call.
News Corp. reported a $15 million net loss on revenue of $1.97 billion for the first quarter of fiscal year 2017, as the company’s book publishing and news and information divisions saw revenue declines. Total revenue was down about 2 percent from $2.01 billion a year earlier.
But its digital real estate holdings remain a bright spot. Revenue from that segment increased 18 percent year-over-year to $226 million in the first quarter.
Digital real estate properties
The increase was driven “primarily due to the continued growth at REA Group and Move, as well as $10 million from the acquisitions of iProperty and Diakrit,” News Corp. said in a statement.
News Corp. expects further momentum from its real estate division “with new products and new pricing,” Thomson said.
One of those products will be a new version of Showcase Listings, which realtor.com will roll out later this quarter, said News Corp. Chief Financial Officer Bedi A. Singh on the call.
Agents who buy Showcase Listings ensure that their name, branding and contact info appears next to their realtor.com listings.
Speaking of realtor.com specifically, Thompson said he was “confident that revenue momentum [for realtor.com] will build in coming months.”
News Corp. is making long-term investments in realtor.com and comScore data shows that realtor.com “leads the competition by a significant margin” when it comes to user engagement, according to Thomson.
Move’s revenue in the quarter increased 9 percent year-over-year to $93 million, “primarily due to the continued growth in its Connection for Co-Brokerage product and non-listing media revenues,” News Corp said.
Agents who buy “Co-Brokerage” can generate leads from unbranded lead forms that appear next to competitors’ listings on realtor.com.
Average monthly unique users of realtor.com’s web and mobile sites grew 15 percent year-over-year to about 53 million in the first quarter, according to Move’s internal data. News Corp. said mobile use is fueling audience growth and represents more than half of all unique users.
“At realtor.com, we generated solid revenue growth even as we retooled our product offerings,” Thomson said in a statement. “We expect that momentum to accelerate this year and to contribute meaningfully to EBITDA (earnings before interest, taxes, deductions and amortizations).”
Higher revenues in News Corp.’s real estate division were partially offset by higher marketing expenses at both REA Group and Move.
REA Group operates a network of property search sites across the world, including realestate.com.au, Australia’s largest listing portal. REA Group bought iProperty Group, which owns a number of Southeast Asian property portals, for $578 million in early 2016. Diakrit, which was purchased by News Corp. in early 2016, is a real estate marketing services firm.
The news and information services and book publishing arms of News Corp. both reported lower revenues than the same quarter last year, and cable network programming revenue was up $4 million year-over-year.
Why the loss?
“Income from continuing operations for the quarter was nil as compared to $143 million in the prior year,” stated News Corp. in its release.
The company attributed the decrease to:
- The absence of a $106 million tax benefit related to the disposal of Amplify in fiscal year 2016
- Lower total segment EBITDA due to slower performance from the news and information and book publishing segments
- Lower equity earnings of News Corp. affiliates, “primarily driven by the announced closure of Foxtel’s Presto service in January 2017”
Inman writer Teke Wiggin contributed reporting to this story.