Exciting times indeed in real estate! Market woes, mortgage troubles, bankruptcies, lay-offs…
Adding to the bad news is that Foxtons, the UK-based discount real estate brokerage, is laying off 350 employees from its New York and New Jersey operations. Some have predicted that this down market will weed out the non-traditional players [see comments section], Redfin being the company most commonly named. Michael Wurzer, meanwhile, says his long-time prediction of declining agent numbers may finally be coming true.
Inman reports that Move.com, the 800-pound gorilla of the business, is being sued by Active Rain, the utterly addictive 50,000-strong online real estate community. It has been an open secret in the real estate world that Move.com was positively salivating over Active Rain’s strong viral network of real estate professionals, and that negotiations had broken off. Now the full story has come out. Active Rain’s side of the story is, essentially, that Move.com took a page out of Microsoft’s playbook of the 1990’s, before they got smacked down by some unfavorable court rulings: court a smaller company, find out everything you can about its business model, technology, and market…then break off the talks at the end and do it yourself. Move.com, meanwhile, says that nothing Active Rain showed them during negotiations was even remotely earth-shattering.
ActiveRain’s official statement to the ActiveRain community: (login required)
Members of the ActiveRain Real Estate Community,
Recently Inman News reported on a lawsuit brought by ActiveRain against Move, Inc. Of course reports of this nature raise a lot of questions, and it has always been a part of our culture to openly discuss things with our community. We would like to be able to discuss these issues more with you. However, since this is a matter of pending litigation, our counsel advises us not to comment.
Should you be interested in the positions of ActiveRain and Move, Inc. in this lawsuit, attached are ActiveRain’s Complaint and Move, Inc.’s Answer filed with the Court in this proceeding.
We thank you for your continued support and understanding.
ActiveRain members, by and large, appear to be supportive of the company, suspicious of Move.com’s intentions, but perhaps a bit concerned that ActiveRain would have considered consorting with Move.com in the first place. The delightful and ever-opinionated Laurie Manny says: [boldface mine]
Imitation is the most sincere form of flattery.
How did Realtor.com/Move.com expect to become successful without us, the membership? Realtor.com has been repelling Realtors with their high prices and lack of performance for well over a year now. Free blogs - for how long? They do not rank up on the engines now on their own, they need AR to do that. What are they offering the membership that we do not already have? Ok, so maybe in about 6 months we would all acheive similar rankings to what we already have?
I think you guys at AR are fantastic, but I have to ask. Why the hell did you jump into bed with such losers to start with? If they were going to pay it somebody else would have as well.
Live and learn.
Other commentary on the same story:
- Joel Burslem at FOREM speculates that some Active Rainers may not be happy to find out they`were about to consumed by the borg, and he goes on to remind readers that the content you contribute to online communities like Active Rain doesn’t necessarily belong to you.
- Douglas Heddings suggests that full-service agents will be partying late into the night at this news.
- Stefan Swanepoel weighs in.
- Brian Brady thinks they’ll settle for $8M to keep this thing from going to court and having a California jury hear stories about cigar-chomping good ol’ boys fleecing a trio of hard-working American entrepreneurs.
- The Libertarian Jesuit Bloodhound says Active Rain doesn’t have a case. Move.com, a big, slow, and stoopid Realtor-teat-sucking monster if ever there was one, actually made a wise decision for once, and decided they’d be overpaying for what was essentially a commodity product.
Pictures courtesy of thisfabtrek.com, foxtons.com, gorillahub.com, move.com, and activerain.com
Tags: Active Rain, Countrywide, Foxtons, Industry, Move.com, Redfin
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23 responses so far ↓
1 Jeff Brown // Sep 27, 2007 at 6:31 pm
Kevin - I realize I’m probably in the distinct minority here.
I’d like to hear your take on the ‘It Matters’ scale. (1-10)
2 Kevin Boer, Realtor, Alain Pinel Realtors, // Sep 27, 2007 at 7:39 pm
Jeff, fair question.
I’d say they’re both about a “5″ on the “it matters” scale: not trivial, but also not earth-shaking.
Foxtons: Is the declining market to blame, as consumers flee to the perceived safety of traditional brokers? If so, what does that mean for Redfin and the other non-traditional ones?
Move.com vs. ActiveRain: The big boys are starting to take notice of this whole wacky blog world. Unable to innovate, they have to either acquire or snuff out the competition.
3 Jeff Brown // Sep 27, 2007 at 7:41 pm
Is AR worth anything close to $1 Million?
4 Kevin Boer, Realtor, Alain Pinel Realtors, // Sep 27, 2007 at 8:46 pm
Since there isn’t an “MLS of social networks” from which we could get data to “comp” Active Rain and find its “market value” we’d have to answer that question using very, very rough metrics.
Here’s my 2 minute answer on this question:
Recent rumors about Google contemplating purchasing a piece of social network Facebook suggest a valuation of $10BN. With 40 million active users, that suggests a value of $250/user.
ActiveRain, also a social network, currently has about 50,000 users. At the same valuation, that gives us a value for Active Rain of $12,500,000.
There are, of course, arguments to make which either increase or decrease that value substantially. Winning those arguments is how investment bankers get rich. Advising the investment bankers, and the parties to the negotiation, is how management consultants get rich. When the parties begin suing each other, that’s how attorneys get rich.
5 John Power // Sep 27, 2007 at 9:24 pm
Its indeed exciting times for real estate.
6 Pat Kitano // Sep 27, 2007 at 11:43 pm
Kevin, your two-minute answer is quite apt. The qualifier is how well an acquirer can build and leverage a revenue model for AR.
I actually think there are ways to develop AR so it attracts more consumers, but it will take capital. Simply put, think AR with listings, think “who owns the bloggers”.
Final word - Move.com and NAR sure is going out of its way to annoy its constituency
7 Kris Berg // Sep 28, 2007 at 6:29 am
Echoing Jeff Brown’s sentiments.
8 Jeff Brown // Sep 28, 2007 at 7:42 am
How ’bout AR building a ‘platform’ that attracts 50,000 users with more than 1% who actually use it at least four times weekly?
What happened between the excitement generated by AR resulting in 50,000 agents signing up, and the current 500 who do anything with it?
Clearly, folks like Brian Brady, who have figured out how to competently leverage AR’s platform are the exception to their rule.
If that’s not the case?
Real estate agents are stoopider than I’ve always suspected.
9 Someday My Princess Will Come … | Phoenix Real Estate and Homes for Sale - Dalton’s Arizona Homes Blog // Sep 28, 2007 at 9:37 am
[...] Boer also weighs in at 3 Oceans. As does Brian Brady. And, of course, Odysseus. (And I finally beat Greg to a post on something. [...]
10 What Would Have Happened If The Active Rain Deal Went Through? // Sep 28, 2007 at 1:44 pm
[...] Boer Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons Does A Countrywide Bookmark this [...]
11 Laurie Manny // Sep 28, 2007 at 1:45 pm
The AR members knew that AR would eventually be sold. If the sale had gone through the members would have begun to write more on their own blogs and would have scattered to an assortment of other networks. Realtor.com and Move.com are thought so little of, I don’t think there are a handful of members, who would have stayed on the network had that purchase taken place.
I agree with Pat, it is about the listings. It has to be monetized and that requires capital.
12 Andy Kaufman // Sep 28, 2007 at 2:09 pm
That would explain the funny looks I got at SF Connect when I suggested that AR was perfect flip bait and would be a great acquisition for Move. As Pat noted, “AR with listings” would be a great next step.
A $12.5 mil valuation does seem a bit steep though. Each user in Facebook provides a treasure trove of data, which at least in theory supports the high per-user valuation. My guess is that AR would probably be worth $6-8 mil. Not chump change by any means.
13 Mr. Arrington, Please Stick To Your Knitting // Sep 28, 2007 at 7:25 pm
[...] David Roberson, Attorney RHRC San Jose, CA ← Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons Does A Countrywide [...]
14 Reaping The Fruits Of Others’ Labor? Or Adding Value To It? // Sep 28, 2007 at 8:24 pm
[...] those who care about such things, the big recent news is, of course, the Move.com vs. Active Rain dustup. While much of the commentary amongst Active Rainers has been supportive of their fearless [...]
15 Andy Kaufman // Sep 28, 2007 at 10:31 pm
whoa! $30M? I stand corrected.
16 Kaye Thomas // Sep 29, 2007 at 6:42 pm
Laurie is right you had to know that eventually something was going to happen with AR.. However the boys should have been a wee bit more forthcoming about their plans.. As to Move.com.. no chance that most of us would have stayed there. Most of my posts are linked to my other blog so it wouldn’t have mattered what they did my content would always go back to me..
17 The Odysseus Medal competition — The long list | BloodhoundBlog: Real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments // Sep 30, 2007 at 11:09 am
[...] Mortgage fraud, When people get desperate, all bets are off.Kevin Boer — Foxtons/AR/Move, Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons Does A CountrywideBrian Brady — Using AR for profit, Activerain.com v. Move.com: The Duplicity at [...]
18 The Odysseus Medal competition — The long list | BloodhoundBlog: Real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments // Sep 30, 2007 at 11:09 am
[...] With that, the long list: Kelly Roark — Agent 2.0, Agent 2.0: not-so-clever play on ‘Web 2.0’ or the future of real estate marketing?Brian Brady — Debunking Guttentag, Debunking GuttentagBrian Brady — Jumping off a cliff, Small Steps Today Prevent Jumping Off A Cliff TomorrowBrian Brady — Using AR for profit, Activerain.com v. Move.com: The Duplicity at Activerain.comTrevor Curran — Old is the new new, Everything That Was OLD is NEW again.Joel Burslem — ActiveRain/Move, Move.com Tried to Buy ActiveRainMorgan Brown — FHA bailout, A Bail Out is Still a Bail Out by Any Other NameKevin Boer — Reaping the fruits, Reaping The Fruits Of Others’ Labor? Or Adding Value To It?Russell Shaw — Foxtons, Foxtons Almost Gone - About to Become a Footnote in Real Estate HistoryTeri Lussier — Huber Heights 2.0, My life online and how you too, can create a Huber Heights 2.0Michael Wurzer — Standards and monopolies, Good Standards Break Monopolies, Not Make ThemDustin Luther — Make an impact, 7 Ways to Make an ImpactRon Ares — Rent vs buy, Addressing the Rent vs. Buy ConundrumDan Green — Fed Funds Rate, How Setting The Fed Funds Rate Is Like Shooting Free Throws With Your Eyes ClosedErik Hersman — RealUmbrella, Creating the Ultimate Real Estate DisintermediatorBill Leider — Opportunity costs, Internet Marketing And Opportunity Cost - Connecting The DotsBrian Brady — NAR and lending, Can the NAR Improve a Buyer’s Financing Experience?Steve Leung — Hidden factors, Hidden Factors When Calculating a Home’s ValueLarry Cragun — Foxtons, A Darling Of Discount Real Estate Rides Into The SunsetDan Green — Visa credit scoring, How Visa USA Tried To Scare Us All Into Using Its Credit Scoring Web SitePatrick Kapowich — Realtor licensing, Inside the Santa Clara County Association of Realtors’ Convention. Buyer beware? No. It’s Licensees Beware.Jeff Brown — Little things, Real Estate Investors — The Little Things Count — Big TimeJeff Brown — Double-edged sword, Double-Edged Sword — OR — Planning & Discipline — What Does Your Retirement Look Like?Morgan Brown — Mortgage fraud, When people get desperate, all bets are off.Jonathan Dalton — Princess will come, Someday My Princess Will Come…Jillayne Schlicke — Deceptive advertising, Deceptive Radio Advertising in Mortgage LendingGreg Kilwein — Wireless MLS, Wireless Usage On The RiseBrian Brady — AR wuz robbed, Active Rain Wuz RobbedMorgan Brown — Housing glut, Housing Glut, Lennar Revenue off 44%, Other GoodiesJonathan Dalton — Sgt. Hulka, Sergeant Hulka and the Phoenix Real Estate AgentDoug Quance — How low?, Ask The Broker: How Much Below The List Price Should We Offer?Jim Watkins — Down market?, Down Sales Market? Think Outside the BoxDaniel Rothamel — Facebook, Why Your Answer to, “Are You on Facebook?” Will Determine the Fate of Your Business in 10 Years or SoonerJonathan Dalton — Real estate 2.0, Real Estate 2.0 and the Phoenix Real Estate ConsumerDan Melson — Sellers pays commissions, Why the Real Estate Buyers Agent’s Commission is Paid by the SellerBrian Brady — Advertising to Ashley, Advertising to AshleyDan Green — Data is granular, Why Real Estate Data Is Granular And Not Mosaic, Or One More Reason To Stop Reading Real Estate HeadlinesDan Melson — NegAm loans, Trying to Rehabilitate the Negative Amortization Loan - NOT!Brian Wilson — Redfin, [Redfin] “I coulda been a contender…”Kevin Boer — Foxtons/AR/Move, Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons Does A Countrywide [...]
19 After Active Rain vs. Move.com, What Next? // Sep 30, 2007 at 8:50 pm
[...] ongoing Active Rain vs. Move.com dustup, our very own ongoing soap opera saga, illustrates one fact above all else: the re.net is maturing. [...]
20 Palo Alto Real Estate Prices Continues To Defy Gravity…And Expectations…But Tight Inventory Is Part Of The Reason // Oct 5, 2007 at 11:21 pm
[...] all the current bad real estate news, with mortgage companies going bankrupt, Foxton’s closing shop, foreclosure rates rising, a liquidity crunch in the credit market, people can certainly be [...]
21 What’s A Discount Listing Worth? How About $78.57? (Ex-Foxton’s Listings Sold Off En-masse During Bankruptcy Proceedings…Good Move For The Buyer?) // Oct 31, 2007 at 12:37 pm
[...] As I previously reported, Foxton’s the now-defunct east coast discount shop, is, well, defunct. They recently fired most of their staff and declared bankruptcy. What to do with the thousands of listings they had, however? [...]
22 Arizona Mortgage Guru » My Turkey of the Year Award for 2007 // Nov 21, 2007 at 4:02 pm
[...] Place: Active Rain Network – I can just hear the hush go through the room. After the failed purchase by Move.com, it’s become clear that AR is not what it is cracked out to be. You don’t own the content you [...]
23 Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons … | ImmediateRealEstate.com // Jan 22, 2008 at 4:19 am
[...] unknown article is brought to you using rss feeds.Here you will find the latest real estate news for buying and selling homes.Adding to the bad news is that Foxtons, the UK-based discount real estate brokerage, is laying off 350 employees from its New York and New Jersey operations. Some have predicted that this down market will weed out the non-traditional … [...]
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