The Murdoch family-owned conglomerate News Corp’s recently released Q2 2021 earnings report and the accompanying earnings call both highlighted the positive performance of one of the multi-faceted company’s assets. Move Inc, which is the parent company of #2 US property portal Realtor.com, had been an underperforming branch of the business, but not so anymore. As News Corp CEO Robert Thompson pointed out, Realtor.com contributed more than the previous ‘golden boy’ REA Group to his company’s profit growth in the quarter.
Front and centre of News Corp’s Q2 financial highlights was the 28% revenue growth seen by Move which reported revenue of $155 million during the period. The success was chalked up to both an uptick in the domestic US housing market as well as the success of the referral model the portal adopted in August last year.
According to one commentator, this might all be a ‘come get me plea’ by News Corp which knows that CoStar is moving into the residential real estate business and is not afraid to splash the cash when it comes to acquisitions. Respected American real estate figure Brad Inman speculated in a recent column on his website inman.com that:
“A buffed-up realtor.com begs the question: is it the next target for a big acquisition by some company such as CoStar, which is in knee deep trying to acquire data monster CoreLogic. Realtor.com might be CoStar’s next stop to compete with Zillow.”
In his earnings call, Thompson raised the open-ended question “How much is Realtor worth?” which in Inman’s opinion was a shout out to Wall Street to value the business higher as well as potentially a “message to potential acquirers”.
There is no doubt that Realtor has come back from languishing in the doldrums of the American real estate marketing scene to become, if not yet a legitimate challenger to Zillow’s dominance, then at least a respectable alternative. In addition to the incorporation of former eBay exec David Doctorow to the CEO position last year the company made key hires in its marketing, technology and product departments throughout the year and its renewed focus has paid off in the metrics. Realtor saw 94 million unique users in January 2021 and, according to Thompson, has outgrown Zillow in terms of audience for the past 11 months.
Realtor may not be worth as much as the $40 billion valuation of its rival or even the $10 billion that Redfin is reportedly valued at, but the fact that its owners and industry commentators are talking about the portal’s value at a time when a big aggressive corporation such as CoStar is moving into residential is certainly food for thought.