Move Inc, the operators of REALTOR.com and a list of many quality products and services to the real estate industry has had a rough ride. In total, they have lost over $2 Billion dollars in their history, and were profitable for two years. On the surface, this sounds like pretty poor performance, but nothing could be further from the truth. They have accomplished some outstanding milestones and could be close to hitting a home run. All of the ingredients are in place. They have the largest consumer audience with strong advertiser support, the most data, and significant agent/broker sales revenue.
Music streaming company Pandora faced similar performance from their early beginnings in 2000, but just hit the profit button to the tune of $100 Million (pun intended). In reading their business story, they sound a lot like Move.
Both Move and Pandora rely on content provided by others to power the services they offer to consumers. Move relies on the relationships with 900 MLSs for their data feeds; Pandora relies on licensing music from record labels. If you will recall, Pandora was successful in negotiating $.08 per song (25% of revenue) to stay friendly with the record industry when Napster was trying to display music content royalty free.
Pandora got lucky.Consumer behavior changed with the release of the iphone and the Pandora application took off in widespread adoption.. Pandora suddenly picked up 35,000 new users a day. Move may also be positioned to get lucky.
It would seem that Zillow, Trulia, Yahoo, Google and others may soon be paying for data just like Wall Street or anyone else if Brokers and MLSs get wise to the value of their data. Without the data, those websites are bankrupt for real estate search.
This is where Move may find their golden goose. Move already has agreements in place for the data, and REALTOR.com is a member benefit. Presumably Brokers would not charge themselves for their own data hence Move is in a different category than other public listing websites. They are more like an MLS consumer website.
If MLSs began charging third parties for data and sharing that revenue with their brokers, it would be a significant game changer to third party websites. And like Pandora, Move revenues from advertisements would be positioned to soar.
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