Preview of the next Zillow Investor Conference call.
This is a parody. I will say that up front.
But the truth of what WILL actually be said in the next Zillow Investor conference call SHOULD go like this IF investors knew what was going on in the industry in my personal estimation.
Spencer: We are winning in the ongoing battle against Move Inc for dominance in the real estate industry.
Investors: Ummm…but you spent $108MM and ended 2013 with a LOSS of $12MM
Spencer: As further proof of that strategy working, we have lured away one of Move,Inc’ key executives…Errol Samuelson.
Investors: What does that have to do with anything and why are you wasting MORE money on increasing your burn rate? How much did he COST us to acquire?
Spencer: Errol has been a well respected figure in the real estate industry for years. blah. blah. blah.
Investors: Ummm..your financials are looking awful and we do not see how you can make enough money from REALTORS to pay us back?
Spencer: Errol Samuelson leaving Move really means that we are close to finishing them off.
Investors: But Boards of REALTORS are dropping you and others are considering it. How are you going to contend with that.
Spencer: Errol Samuelson. And when we beat R.com to a pulp. Errol Samuelson.
Investors: But Errol has lost all credibility and will not be able to sway virtually ANY of the MLSs given how he left Move? The MLSs were against Zillow because Zillow has sucky Zestimates and cannot seem to keep the listings up to date. Having a smooth talking spokesperson does not change that.
Spencer: Errol Samuelson. End Game Strategy. And when Errol Samuelson is not at Move, they will lower their marketing spend so we can too, but in the meantime it is a GOOD thing that our market cap is huge and that we can throw your money away at breakneck speed so that we can finish off our competitors.
Investors: Ummm… even if you did your financials would still look AWFUL.
Spencer: Erroll Samuelson. Outreach. Grope the REALTORS. Erroll Samuelson. We think they have more money.
Investors: Ummm…no they don’t. You should have learned that by spending 108 Million in 2013 on marketing to less than 250,000 of them that have any marketing budget to speak of. You went from slightly profitable to way unprofitable.
Spencer: Errol Samuelson. Grope the MLSs. Find the money. Somebody will pay. He can accomplish what Bob Bemis was unable to. We GOTTA have the listings or we’re toast. Errol Samuelson. Get dominance. Errol Samuelson.
Investors: The REALTORS are getting wise to the fact that you are going to HOSE them. How is Erroll going to do any different than Bob Bemis or anyone else?
Spencer: Errol Samuelson. He walks on water. We bought him. We own him. He will make us whole.
Investors: With him leaving Move, what happens if their stock price DROPS and REALTORS are smart enough to buy BACK their BRAND and then create a NATIONAL MLS that works like Canada’s??
Spencer: Errol Samuelson. Strategy. MBA speak. Errol Samuelson.
Investors: No seriously. You have 3+ BILLION of our equity in your hands, WHAT would happen IF REALTORS bought back REALTOR.com buy buying a controlling amount of shares of MOVE, Inc?
Spencer: Umm… well…if that happens then you, the investors are screwed. And I am going to enjoy a vacation. Oh yeah. And the Trulia investors are HOSED as well. Errol Samuelson.
<end of parody>
The truth of this is plain to see:
Move Inc. is a bumbling mess. Check out Rob Hahn’s post to see what a furious CEO who got blindsided sounds like:
and see what Bob Bemis has to say:
Bob SUGGESTS to Move Inc that they should give REALTOR.com back to NAR. (I hope this happens!! But I am not holding my breath) Regarless of traffic they are still making money and Zillow is not.
That said, my prediction is that Move, Inc will continue to spend on marketing in the ongoing war to ravage the REALTOR unless their stock price tumbles. (It is less about traffic and MORE about how deep they can reach into REALTOR wallets. Their price to earnings ratio at their current market capitalization of 497 MM is 925.44 (in English, that means if you are investing, you ain’t very profitable AT ALL)…but compared to Zillow they are a bargain. Zillow’s market cap is over 3 Billion (that is 6 times Move, Inc…kids….that is a pile of money) and they are not even profitable. Sooner (rather than later), Wall Street HAS to realize that this is overheated. Insiders certainly have. Or REALTORS are going to pay everything that they own and THEN some…to Zillow to support a stupid valuation.
Errol is not the savior. (But you can BET that Spencer will sell him that way to Wall St.) And the bottom line is this. The future of ALL of these companies lies in the hands of the people who actually own the data. The brokers. If they start deciding to pull their listings from syndication as many have recently, Zillow becomes a house of cards. As does Trulia. And for that matter as does R.com.
MLSs: Pay attention: When Errol comes knocking with Roses, a bottle of wine, and the promise of dinner at the best restaurant in town…remember that the fundamentals have not changed. And the brokers / MLSs have more power now than they have had in years to just say no.
Just my thoughts. What are yours?