Tag Archives: Move

[PREMIUM] Move, Trulia, Zillow: Q1/2013 Report – The Narratives Take Shape

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diverging-paths-cropped

The narratives take shape, and start to diverge in Q1/2013.

When I began writing this report, I did not think that a mere update on quarterly results would reach over 12,000 words and require so much work. After all, the annual report is the really important one, and the quarterly reports are mere milestones along the path.

But with all of the changes going on in real estate today, it turned out that there were some really significant signs and developments in Q1 of 2013. The three companies – Move, Trulia, and Zillow – have begun to diverge from each other in not just performance, but in their overall strategic narratives. Each has made important strategic decisions and has begun to execute on them, and the first quarter of 2013 provides glimpses into what the future holds.

Move, the veteran, actually showed revitalization across the board. But it is unlikely to get much credit for its strong performance because the two upstarts outperformed Move on virtually every metric. Nonetheless, the narrative for Move has shifted subtly, but importantly. The content to connection to close story is a good one, and Q1 suggests that perhaps, that strategy is working. At the same time, there are some hints that perhaps Move is undergoing a far more fundamental change in who they are and what they do.

In the case of Trulia, of course, it isn’t merely a glimpse. With their $355M acquisition of Market Leader, Trulia has more or less set its strategic path for the next couple of years. It was a bold move, probably a necessary move, and one filled with high risk and high reward. Coming on top of an extremely strong quarter, where Trulia beat out Move handily and either outperformed or kept pace with Zillow on almost all key metrics, the acquisition sets Trulia’s strategy and narrative for the foreseeable future. If I wrote in the last report that I wasn’t sure what Trulia’s strategic vision was, well, consider that corrected. It is now obvious what Trulia’s narrative will be.

Zillow’s Q1 results and the important management discussion that followed can be described with a word: confidence. Having announced in the 2012 earnings call that Zillow plans to start heavy TV advertising to take over the “brand whitespace” that is real estate, Q1 gave us some results and some glimpses into how that is working. This is a company that knows it has the lead, knows it’s winning, and has decided to start building enduring competitive advantages. Trulia won the quarter, but it will take more than one quarter to catch up to the frontrunner, who knows he’s out front, and by quite a lot.

All of these developments will have deep strategic implications for everyone in the real estate industry, from brokers to agents to franchise companies to MLS and Associations to vendors and other technology companies. Some of the implications will be obvious, and others less so. What I have tried to do is to tease out details on the one hand, while taking a step back and looking at all three companies and their narratives to get a sense of the overall shape of things to come.

For all of you who have subscribed to access this Premium Report, my deepest gratitude. For those who have not, please click on through and you’ll get to page where you can purchase access to this, and other, Premium Content.

This report is provided for informational use only, intended to assist professional investors and industry professionals. The information contained herein does not constitute investment advice and may be subject to correction, completion and amendment without notice. 7DS Associates assumes no duty to make any such corrections or updates. While the information contained herein contains opinions and projections, it is not our intention to state, indicate or imply in any manner that current or past results are indicative of potential future results. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with his own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. 7DS Associates disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result in an investment in any company mentioned in the report.

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[PROMO] Zillow, Trulia, Realtor.com: A Strategic Analysis Report

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ZTR-GOT-throne.001

The 2012 results for the Big Three publicly traded real estate portals — Zillow, Trulia, and Realtor.com (Move, Inc.) have been filed, and their senior executives have endured the grilling by Wall Street analyst types. There have been volumes of words already written about them, by financial analysts, by finance bloggers, by real estate industry people, and so on.

But I got interested in doing a substantial treatment of all three companies, since these three in some ways drive the real estate industry into unknown territory. Now that Trulia is also public, and reporting on full year results, I thought it time to take a close look at all three companies, see how they’re doing, what they’re doing, and what they’re planning on doing.

As I got into the project, however, it became quickly obvious that this was no mere blogpost. I couldn’t do justice to the topic just going off the top of my head. I ended up spending dozens of hours reading through their SEC filings, listening to the earnings calls and reading their transcripts, and really having to think about what these things mean. The result is a Full Report on their 2012 results, as well as what strategic insights we can get on all three companies, as well as on the shape of the real estate industry as we go forward. It’s weighing in at over 10,000 words, 26 printed pages. I spent a ton of time on it.

And I realized, I can’t just give it away like one of my blogposts, because this wasn’t “fun” to write. It was interesting, but it really was work.

So I’m charging for it. That may mean that only three of you will end up reading what I spent so much time on. You know what? I’m comfortable with that outcome. Because it will tell me in no uncertain terms who values my analysis and opinion, and how much they value it.

But let me provide you with some of the topline insights so you can at least get a sense of what you might find if you do pay for it.

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When Life Hands You Citrons, Make Citronade: In Which I Differ With Smart Analysts

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A cool refreshing drink…

I’ve gotten more than one request from readers to discuss the brutal analysis report on Zillow by Citron Research. I didn’t think I’d have much to add to a stock analyst’s report that tends to be heavy on financial metrics and such, but it turns out that the Citron Research report is indeed worth reading. And opining about. Seeing as how I don’t own any Zillow, haven’t shorted Zillow — or anyone else, and no one is paying me for this post… you may value my thoughts at what you’ve paid for them.

Fundamentally, Citron’s report isn’t an attack solely on Zillow; it’s an attack on the entire business model of Zillow, Trulia, Realtor.com, and everyone else in the “aggregation” business:

We can all agree the internet is not a new technology. Internet-generated leads to realtors have been getting sold for close to 15 years. Zillow itself has been around for seven years. If, after seven years and hundreds of millions of dollars of Wall Street’s money, all it has generated is a $100 million revenue run rate, why should the future be exponentially better than the past—especially with a plethora of well capitalized competition? That Zillow has captured a whopping 1% of real estate ad spend after seven years, definitively reveals a history of rejection of their model by their core market. This is not a broken business model; it is a business model that has never worked. (Emphasis in original.)

I think that’s going a step too far, and ignores some of the real simmering fault lines bubbling under the surface in the real estate industry. Since Citron isn’t new to covering the real estate technology business (“yes, we are veterans in this space”), I would have thought they’d be more aware of those fault lines. If they’re not, I invite them to subscribe to this here blog, since I often discuss them.

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Key Metrics of the Big Three Portals: Move, Trulia, Zillow

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First of all, congratulations to Pete Flint and the team at Trulia for their successful IPO. Trulia is now TRLA on the NYSE. The environment wasn’t necessarily looking friendly for a real estate related IPO, but Pete and crew navigated it. So a heartfelt congratulations to you all.

Second, the thing that’s great for a blogger/commentator/bigmouth like me about Trulia going public is that we now have some real data to compare the three major portals on. (Well, sort of… see below for details.) Public companies have to make public filings, and tell the world how they’re doing. So I decided to take a look at some topline numbers, without a whole lot of detail, looking into the discussions, etc. There are some interesting things that pop up when you compare Move, Trulia, and Zillow across the board. Continue reading →

A Small Step, Fraught With Significance: ListHub Introduces “MLS Preferred” Concept

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Oh my...

Back in November of 2010, I wrote about Move’s acquisition of ListHub and what it might mean for “Syndication Quality”. I thought then that the reason why Move acquired ListHub was strategic — to control the source of listing data, in order to impose on its main competitors the same restrictions that Move had on operating REALTOR.com:

There was little doubt in my mind when the acquisition was announced that what Move was doing was a strategic maneuver to neutralize some of the advantages that its big competitors had — freedom to do whatever they wanted with the data, given the widespread ignorance of brokers and agents on intellectual property issues.  Having spoken to Messrs. Berkowitz and Samuelson, as well as other players in the drama, I have confirmed that this is indeed the mutual vision of the Move and ListHub teams.

“Let’s see how Trulia and Zillow compete if they have to live up to our standards of data protection and data integrity” might be something Move executives never actually said, but I rather think they are thinking it.

Well, it only took a year and a half, but I believe we’re starting to see the strategy be implemented:

ListHub, the largest syndicator of real estate listings and website analytics, today announced the launch of the ListHub Preferred Publisher Program. Real estate brokers syndicating listings through ListHub’s Preferred Publisher Program can now quickly identify preferred publishers and publisher rules, rate publisher websites and access reports through the control panel. The new features bring greater transparency, control and protection to real estate brokers as they syndicate listings to multiple publishers. ListHub is operated by Move, Inc., (Nasdaq: MOVE), the leader in online real estate.

Earlier this week, prior to the press release, I had the rare opportunity to get a demo from Luke Glass, General Manager, and Mark Wise, VP Operations and Technology, of ListHub of these new features, and to ask them some questions about what they were doing. Well, what they’re doing is a small step, but it is one fraught with real significance for real estate data policy.

There are two things in the new ListHub that work together to create the significance. Let’s dive in, shall we?

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Curious Things Are Afoot, Part 2: Commodities, Power, and Change

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Any excuse to post this picture...

In Part One, we congratulated Ernie Graham and his team at SocialBios for getting acquired. I hope he picked out a nice Lamborghini Reventon in taxicab yellow.

The second Curious Thing that came about just as Move was announcing its acquisition of SocialBios was the confluence of two seemingly unrelated things. Making sense out of unrelated things — that’s what we do here.

First, over on Notorious ROB, I wrote about the terrible June jobs report, and the statement by Lawrence Yun, Chief Economist of NAR, that because of “shrinkage” in the real estate industry, most REALTORS would see a bump in their personal income.  That is, pie might be shrinking, but the number of people who want to eat pie is shrinking even faster.

Second, the Federal Trade Commission announced that it would not enforce MARS (Mortgage Assistance Relief Services) regulations against licensed real estate brokers and agents. From the statement:

In recent months, a number of real estate brokers and agents (“real estate professionals”) and their representatives have contacted the Commission to question the applicability of certain provisions of the MARS Rule to real estate professionals who assist consumers in obtaining short sales. In particular, these persons have raised concerns about the accuracy and comprehensibility of the disclosures mandated by the Rule, and the unintended consequences that might result from application of the advance fee ban, in the context of a real estate professional assisting a consumer in negotiating or obtaining a short sale. [Emphasis mine.]

As a result, except for certain provisions having to do with misrepresentation, real estate agents are not subject to MARS rules as long as they are licensed and in good standing, and working on a short sale. Behold the power of NAR.

What the hell do these two things have to do with each other, nevermind with social and real estate? Has Rob finally gone over the edge? Read on, but as always, caveat lector.

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Curious Things Are Afoot, Part 1: Move Acquires SocialBios

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This is the first part of what I think will be a three-part examination of some rather curious things I’ve been seeing.

First of all, I’m sure other sites will be announcing the news that MOVE has acquired the startup SocialBios. From the press release:

Move, Inc. (Nasdaq: MOVE), the leader in online real estate, today announced its acquisition of SocialBios, an award-winning social search platform. SocialBios allows individuals and companies to create one social hub for their online profiles through interactive ‘About Us’ pages that simplify the discovery of shared connections on Facebook, LinkedIn, Twitter, Foursquare and Google without sacrificing their privacy.

The acquisition of SocialBios points to Move’s acceleration into the area of social and its integration into the real estate search experience throughout Move’s online real estate network. As a result, Move will leverage the SocialBios platform and talent to develop products that connect people with real estate professionals based on the commonalities of their on- and offline social networks..

…

As part of the acquisition, SocialBios founder Ernie Graham and co-founders Ira McMahon and Andrew Van Tassel have joined the product development team at Move, Inc. Graham, who will head up Move’s social product strategy and development team, will work with the Move’s franchise and broker customers to develop social graphing strategies that help them facilitate more connections between their agents and brokers with consumers.

I wrote about SocialBios a few months ago when I met Ernie Graham, and the events of that evening are sealed under a blood oath of secrecy. But suffice to say I thought he is a smart guy, and what’s better, a great fella to boot. SocialBios won the ‘Best Tech Startup’ award at Inman NY earlier this year, and now the founders have gotten fabulously rich (or so one hopes).

So congratulations to Ernie and his team, as they now move into the tightly-controlled PR environment of the publicly traded company. Henceforth, he and his whole staff are going to have to learn how to keep their mouths shut lest they make forward looking statements of some sort. <grin>

But that news alone is not worthy of a post. So what makes this interesting? Read on, but caveat lector.

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On All Things Zillow

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Given that Zillow is much in the news of late, and a number of you have asked what I thought about all of the various thingamajigs in the air, I figured, rather than a series of posts on particular topics, I’d just knock them all out in one sitting. I don’t find most of the news all that earth shattering, but do have some thoughts on a few of the issues confronting Spencer Rascoff and his team.

So this post will be more rambling than usual, but hopefully chock full o’ goodness in bite-sized chunks. You’ve been warned.

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Zillow Acquires Postlets; Perceptive MLS CEO’s Draw Up War Plans

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As you have probably heard by now, Zillow has acquired Postlets, the popular listings syndication platform. The initial reaction has been quiet, or supportive.

Brian Boero of 1000watt Consulting wrote about the acquisition:

This comes just a few months after Move, Inc’s acquisition of ListHub, a deal that upped the competitive ante between the leading online real estate sites. I likened this acquisition to Move “Cutting in” on the content/distribution dance between Trulia, Zillow and their industry listing partners.

It was a smart play by Move. And now Zillow has countered.

Postlets, while claiming 500,000 registered users, is to my knowledge a smaller syndication player and has struck me as more agent-focused than ListHub, which serves many large brokerage companies.

And Matthew Ferrara of Matthew Ferrara & Company tweeted (in response to my tweet):

Note that my immediate reaction to the news was, “What the hell is Zillow thinking?”

Given that Move has already acquired ListHub, and commercial real estate software giant Yardi has acquired Point 2, leaving not a whole lot of potential syndicators for Zillow to buy up, that reaction may seem puzzling. Let me explain.

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Move, Inc. Moves Into Mortgages

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MortgageMatch.com

Move's Newest Venture

Move (NASDAQ: MOVE) has just launched MortgageMatch.com — a consumer-facing application that Move spokespersons say is the most important thing they’ve done since… well, acquiring ListHub. I’m writing this while sitting on the webinar/teleconference where they’re unveiling it, so… my thoughts are likely to be somewhat scattered.

Once the announcement is made, and a few other thoughts are heard, I may revisit this topic again, but my initial impression is that this is a very nice piece of software likely to cause a bit of a kerfuffle due to some interesting business decisions.

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