a year as well as your "team" and you generated a profit of $.01 last quarter. Well, we're extremelly proud of your work, we would like to increase your base salary and bonus for the rest of the year. It seems like the "model" is working very well for you! LOL Gotta love it, wait until the real estate market really slows down. What part of the model doesn't make sense don't you understand? Why will agents pay more to advertise if homes are not selling? Incredible how blind people are.
a point about advertising;
Last year; 1 1/2 month inventory with an average 1 week or less before entering escrow.
This year; 6 month inventory with an average of several months before escrow.
These figures may not be exact, however there are perhaps 4 times more homes on the market at one time, then there were a year ago, and they require more advertising whether or not the brokers want it to be if they don't.
Add to that the fact that, believe it or not there are still a lot of people out there who are just begining to become computer savy. The pool of internet "eyes" is still growing.
Well, thanks. I'm not really trying to debate with you, you're entitled to your opinion. The issue is bigger than advertising budgets per say, it's a real estate market issue. Less buyers, less homes being sold, less real estate agents staying in the industry; therefore, lower advertising budgets (overall) since you have less agents in the industry now.
I would not bring this up if the company had the financials to back them up (strong 2nd quarter results), but they don't.
While I agree that Move doesn't have a bright future I do need to point out that the decrease in home sales will indeed cause Realtors to spend more money on advertising. The phones are no longer ringing off the hook and advertising is going to increase because of this. The homebuilders and mortgage companies will increase spending even more because of the slowdown.
That's questionable, what you're leaving out of the equation is that (assuming advertising does increase) there will be less real estate agents advertising due to the facts homes are not selling as fast anymore. The issue is will the agents that remain advertise enough $$$$$ on realtor.com to make up for that difference? I say no, but I'm sure other will disagree with me. Furthermore, if homes are not selling as quick, that implies there are no buyers, if there are no buyers, you can advertise all you want my friend and still not sell much. That's the big picture.
"Why will agents pay more to advertise if homes are not selling?"
If the real estate market slows down to the point that homes are no longer selling themselves with little to no effort on the part of the selling agents, then the selling agents will have to start working harder to sell those homes. This includes getting out, showing the home, advertising the home, etc. And, in a public environment in which more and more people are browsing real estate on the internet, at least part of that growing advertising demand is likely to be spent online, thus increasing the opportunity for sellers of online real estate advertising, such as Move. Thus, it is likely (IMO) that real estate agents will increase their advertising spending when they can no longer count on an endless supply of eager buyers to snap up every house they represent, and Move is in a good position to profit from that.
On the other hand, as the market slows down and selling a home requires more and more actual effort and investment, many of the people who got into the real estate business over the last few years, who likely did so because it looked like easy money during the real estate boom, will likely just as easily slip back out of the real estate business rather than ramp up to compete with the hardened professionals. This could result in a smaller customer base to market real estate advertising products to, reducing the opportunity for sellers of online real estate advertising, such as Move.
Personally, I suspect that the second effect will mostly cull real estate agents who aren't likely to spend much in advertising one way or the other, and so this effect will be unlikely to significantly affect Move's sales. (I could, obviously, be wrong, but that's my feeling.) But the first, of an increased demand for real estate advertising products, seems to already be happening, and can only grow as the market slows.
If only Move can keep up with the tide, as schools of wanna-be competitors crop up all around it looking for angles into that same feeding ground...
Few points I'd like to make:
1)what makes you think agents are going to increase their advertising budgets if they are having a hard time selling homes? No money = bigger budget? Makes no sense.
2) If they do increase their advertising budget (boubtful), it will go to all types of advertising (paper, internet, etc.) not 100% to realtor.com/Move.com
3) Most important, so you're saying when homes were selling at a rapid pace in the past two years, agents were not advertising as much? Are you serious? They were advertising more than ever, they were selling so they had more money to spend on their advertising budget, that's as good as it gets. Not the opposite.
4) Real Estate advertising is not going away, but is definitely going to decrease 'severely' from here on. Realtor.com targets real estate agents, how many of those do you think are going to completely get out of real estate because is not easy to sell a house anymore? Take your guess.
5) The top guys make each $1M a year, they get a bonuses for reporting a profit of $0.01 per share? And that profit is from Interest income, LOL. They continue to 'invest' in other products right? Same story as last year.
That's a perfectly logical assesment.
One of the major problems MOVE has is that it is biteing the hand that feeds them. (Most) agents who have been in the business are disgusted that MOVE would try to make a profit from them since Realtor.com is supposed to support them. Add the fact that some firms are or will be pulling out of the MLS all together and/or creating their own systems (ala ReMax) and then the very reason for being on Realtor.com diminishes. This is not a technology company as some try to make it to be... rather an ad company that uses some technology... huge difference in many ways.
On paper it sounds good... in practice it doesn't work. MOVE and SOLD should get together under the new symbol MOLD.