On January 11, 2001, Homeseekers received a warning from the NASDAQ that if the site doesn't get its stock above $1 in the next 90 days, that it could be delisted on April 11. Yet the company has put forward a number of initiatives that are already producing results. Will investors boost the stock price in time?

Homeseekers CEO John Giaimo sees stock price and profitability as unrelated. "Even if we were profitable tomorrow, that might not be enough to avoid being delisted," he says, "Our problem has been that we haven't done a good job getting our story out so that investors understand what we do."

Many investors, acknowledges Giaimo, see Homeseekers and Homestore in the same category, and view Homestore as the 800-pound gorilla.

"You look at Homestore and it is valued at about 91 times their sales," says Giaimo, "and Homeseekers is valued at one times sales. We are being valued like a company that is going out of business, and we are not."

Giaimo admits that Homestore has done an excellent job in wooing the investor community. "We are selling at less than one percent of Homestore's value, yet we have 20 percent of their revenues," says Giaimo. "Obviously, we are under radar screens, and we aren't being heard." Editor's note: Valuations can be subjective, but some investors say that Homeseeker's revenues are closer to 7 percent of Homestore's.

To rectify the problem, Giaimo is going on the road to tell his story to the investment community, and the company has hired an investment relations specialty firm.

"When you look at the two companies, there are some similarities, but there are also some important differences," he says. "I think when the investment community learns what we have to say that they will realize that we are an absolute bargain and we could shortly be a $6 or $7 dollar stock again."

What would make a difference for Homeseekers in today's volatile stock market? Good news is often disregarded by investors who have grown overly dependent on Fed announcements of rate hikes and cuts. Are investors interested in company fundamentals anymore? Not if the bottom line leaks red ink, but they seem to forgive market leaders which have also failed to reach profitability.

"Some good news would help," says Giaimo. "We want to be cautious in our estimates but we are on target with our revenue increases of 20 to 30 percent per quarter, and that will continue."

So far, key recent announcements directly related to immediate revenue boosts have failed to budge the stock, proving Giaimo's point. Could it be that investors simply don't care?

Homeseekers - the Uncola™ of home sites?

Soft drinks are categorized by their artificial flavor bases, cola, lemon-limes, grape, etc, but there's no question that Coca-Cola rules the industry. To compete, brands like 7-Up and Big Red built their names by positioning their drinks as alternative choices. The world's leading lemon-lime, 7-up called itself the "Uncola," while Big Red's slogan was "Have a Big Red Instead." They know they they aren't going to play King of the Mountain with Coca-cola and they don't even try, but their message of choice has a powerful enough impact that they are also number one in their flavors. Despite its huge advertising resources, shelf space warmongering, and the introduction of a competitive strawberry drink, Coca-cola has never been able to unseat Big Red as the number one soft drink in its category.

There's a lesson there for Homeseekers and it could be making itself the uncola marketing alternative to Realtor.com.

Like Homestore, Homeseekers has several operations under its umbrella, and just as Homestore would like to be perceived as a technology company instead of a homes site, Homeseekers also is a technology solutions company. Homeseekers three main businesses are the Homeseekers' public site, its Web-based MLS information management system, and agent productivity tools. But how they go about their businesses is very different.

Homeseekers and eBay

Just selected as a best homes site by Forbes magazine, Homeseekers has failed to take top place honors on other lists because it sticks to the philosophy that real estate agents should be the source of real estate information. While some agents have failed to appreciate Homeseekers' sacrifice, others are beginning to as they compare Web site results with other providers. Homestore has sold twice as many subscriptions and has pleased its investors with its dazzling array of technology relocation tools for consumers, but now it has come under fire from some Realtors who claim there are too many ways for consumers to be distracted away from their listings, reducing their chances of capturing leads.

To date, lead capture has been a carefully avoided topic for ASP providers because true figures would put most out of business, but that is exactly why lead tracking matters. It is the one feature that can distinguish Internet marketing from any other, primarily because it can be automated. Any broker who tries to track leads from print ads knows this is true, so look for lead tracking/capture tools to be a key point of comparison for online Realtor subscribers of the future.

Homeseekers has already addressed this issue with its automated feature that calls agents when a lead comes from their Homeseekers Web site.

But with its deal with eBay, Homeseekers really takes the gloves off with a bold revenue plan which couldn't be more perfectly timed, and the beauty of it is that it provides a distinct relationship from which to track leads. With Internet home buyers escalating by double digits yearly, and with many Realtors seeking additional or alternative marketing solutions to Realtor.com, Homeseekers could Uncola its way to profitability quickly.

Homeseekers announced its revenue model for its partnership with eBay, the world's largest online marketplace. Starting in April, the company will debut its new e-Bay real estate division, offering Homeseekers' 1 million plus listings for sale, homes for sale by auction, and exclusive advertising spaces for brokers by region. The company will charge brokers for key advertising spots, and it will also charge agents to post their listings.

This is significant because brokers, franchises, and agents have not paid portals to promote their brands recently. Only rarely do brokers advertise online, and usually only with print publications with whom they already have a relationship or a niche. An example of this is Forbes.com which promotes luxury real estate as one of many lifestyle categories.

The reason is simple. Portals like Homeseekers and Homestore have had a national focus, not a local one, and rely on large volumes of listings to attract consumers. But, they make little money on consumers. So, to make money, they turn to products like Web sites, advertising, and loans. Portals get listings from MLS organizations which are broker cooperatives; and, they have deliberately stayed out of the local broker advertising game until now. If large brokers were shown favoritism via advertising, other brokers might pull their listings from the MLS public posting agreements. It's a little known fact that MLS cooperation does not assure that all listings go to the portal. Many brokers reserve listings from public display.

Homeseekers timing is good because it will provide brokers the chance to advertise locally on a national site and because Homestore's recent purchase of Move.com has received mixed reviews in the broker community. While some applaud the purchase as strengthening the Realtor agenda (to remain at the center of the transaction) others view the merger as a danger to independents and competing franchises which are not under the Cendant umbrella.

With over 50 percent of homebuyers using the Internet to look for homes, according to Jupiter Research, many brokers may look for alternative ways to strengthen branding. The e-Bay/Homeseekers advertising model might be just the positioning they are seeking, particularly if they have niche business models like fee-for-service or buyer brokerage.

Homeseekers software

Homeseekers recently acquired IRIS, and ISG/Formulator and under its software arm which already had a number of agent productivity products, HomeSeekers Software Solutions, the company has developed a cohesive line of MLS access and agent productivity software. These are two things agents need if they are going to do anything more than use e-mail on the Internet.

Homestore also has productivity software under its Top Producer brand and is also working on bringing together a combination of client/office/transaction management solutions onto its eRealtor™ platform. A key piece, the offer and transaction management portion, has just been acquired through the Homebid company. But it's not on the market yet, and is still in beta-testing. Homestore plans to roll out eRealtor to brokers.

Homeseekers, on the other hand, is wooing the agent directly. Not only has Homeseekers beat eRealtor to the street but it has also integrated all its software products into one new brand called Synergy (tm.)

Synergy combines contact, schedule, listings and transaction management on one platform, complete with a private Web site for clients. For tasks that typically took hours, this new combined product handles them intuitively and efficiently, speeding the entire process and eliminating many tedious repetitive functions. Synergy (TM) links data, as well as customer information and keeps track of the myriad of complex steps and transactions that make up the real estate process.

HomeSeekers.com has put an affordable price on it of $299 and will reduce the cost to $249 for agents who purchase before April.

XMLSweb

The one product that real estate agents use every day without fail is their MLS access software, and that is why two years ago, Homeseekers decided to get into the MLS access business. While it is widely acknowledged that MLS systems don't make money, the software to access them does, and Web-based systems offer new opportunities to be profitable.

In addition to the 100,000 agents that Homeseekers seats with its MLS listings management product XMLSweb(tm), the company has just signed a multi-million dollar contract with Homeshop.ca, Canada's soon-to-be National Residential Listing Service. The agreement allows Homeseekers to manage the listings and integrate them with marketing tools for Realtors.

For those not in the know, it is MLS listings that is the core of what Realtors do - checking new listings, e-mailing them to clients, updating them, and using them in their personal marketing. Almost all other online marketing including Web sites, newsletters, and e-cards are enhanced by listings. To be able to provide this at the MLS information management level is a key advantage for Homeseekers, particularly for an MLS with potentially 65,000 members who are teed up to buy additional Homeseekers productivity products through the MLS. Editor's note: Homeshop.ca is not yet officially in business, but it has been venture capitalized, and in the meanwhile, other Canadian MLS services exist and allow listings to be shared with Homeseekers and its competitors.

But Homestore is already ramping up competition with its Wyldfyre MLS initiatives. One of the largest MLS companies in the nation, MRIS is currently in beta-testing Wyldfyre MLS access products, and Wyldfyre has already sold at least four other MLSs, including the state of Alaska.

According to Giaimo, the company has a two-year head start over Homestore in this area, and has built knowledge equity with MLS organizations.

"They (Homeshop.ca) didn't throw a dart and hit us," explains Giaimo. "We were selected as their provider after a painstaking selection process.

Homeseekers' customers

According to the company, Homeseekers.com's suite of technology solutions currently serves a network of 275,000 real estate professionals -- 110,000 agents through its XMLSweb(TM) multiple listing service product, (plus 65,000 more when the Canada contract begins) more than 90,000 agents through its HomeSeekers Software Solutions Division, 20,000 agents through its real estate industry publications, and over 25,000 agents through its agent website product. HomeSeekers.com also provides e-mail services to approximately 30,000 agents.

That's a lot of uncola for investors to leave in the refrigerator.

"It isn't going to be the eBay deal or any one deal that saves us," says Giaimo. "What will make the difference is telling our story and time."

Published: March 5, 2001

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.