Move Inc's annual report has shed light on why the company registered another drop in revenue for the fourth quarter of 2009, and warns there could be more tough times to come.
Move, which runs top US real estate website realtor.com, explains that its revenue decreased by US$30.1 million - 12 percent - to $212.0 million over 2009, compared to $242.1 million in 2008.
"The decrease in revenue was primarily due to a decrease in our realtor.com and New Homes products," the report states. "We experienced lower Featured Homes and listing enhancement revenue on realtor.com directly related to reduced purchasing by one large broker customer."
"In addition, there was reduced spending on listing enhancement and Featured Homes products by our agent customers due to general economic conditions partially offset by increased revenues generated by our improved Featured Community product," the report continues.
The report goes on to outline the other areas where realtor.com's advertisers are cutting back, including display advertising, rentals featured listings, and lead generation for moving services.
"Entering 2010, delinquencies are expected to continue to be double that of foreclosures, causing uncertainty in the price floor within various markets," Move's report explains.
"This coupled with the fact that banks have significantly tightened their credit standards for mortgage loans will make home purchases in the upper end of the market that much more difficult. We believe these market conditions will continue to put pressure on spending by real estate professionals and brokers in the next year."
While Move isn't optimistic about 2010, at least one analyst thinks the company could be in for an improved year. investopedia.com's Sham Gad maintains that the company's operational changes throughout 2009, along with the hiring of CEO Steve Berkowitz, have put it in a strong position.
"[T]he gem here is Berkowitz and his track record at turnarounds, notably with online site Ask Jeeves," Gad says. "Despite the quarterly numbers, shares were up over 11 percent on the earnings news. Continued success with the operational turnaround will likely attract more attention to the stock."