Sees Big Revenue and Traffic Drop as Takeover Talks with CoStar Group Continue

February 10, 2023
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News Corp, the Murdoch-owned parent company of Move Inc and majority shareholder of REA Group, has announced the results of its activities for Q2 of the Australian financial year. Notable points from the company's missive to the market include:

  • News Corp total revenue was down 7% to $2.5 billion.
  • Total EBITDA was down 30% at $409 million.
  • Revenues at Move Inc were down 14% at $146 million.
  • Monthly unique users of were down 23% year-on-year at 66 million.

News Corp's bottom line was heavily impacted by inflation and a surge in interest rates. Company CEO Robert Thomson said that he expected there would be around 1,250 redundancies at the company in 2023 to try and balance losses.

In an earnings call, Thomson also spoke about the ongoing talks between News Corp and CoStar Group to sell Move Inc. Although he did not give any more specifics about the deal, he did confirm that talks were still progressing and praised CoStar Group's leadership and business acumen.

"...we have much respect for CoStar as a company, for its leadership, what they’ve created, what they could create, what they could do for competition in a very competitive digital real estate market here and, frankly, how we could profit."

If a deal were to go ahead, CoStar would be getting a serious challenger to Zillow, albeit one that is not exactly on an upward trajectory. Traffic was down at and its much-vaunted referral model saw its share of revenue decrease from 32% in the comparison period to 27%.

Move Inc's core 'Real Estate' business which represented 83% of total revenues, decreased by $25 million (17%) as overall lead volume dropped 37% year-on-year. Although it remains to be seen whether Zillow has seen similar decreases, with the Seattle-based company due to publish its results next week, CoStar will likely be using the downturn in Move's numbers to negotiate a lower price than the $3 billion quoted by Bloomberg.

February 10, 2023
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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