Move Inc. officials, during an earnings presentation Thursday, announced the delay of some technology initiatives that will add community forums and neighborhood information to its property-search sites, including Realtor.com.
The relocation of a company data center from California to Phoenix, Ariz., which will cost about $6.5 million, will likely be completed in fourth-quarter 2006 and the enhanced features are on hold until the new data center move is completed, said Mike Long, Move CEO.
Move re-branded earlier this year from its former title of Homestore. The company today (NASDAQ:MOVE), reported net income of $1.7 million in the second quarter, compared to net income of $3.3 million in second-quarter 2005.
Traffic at the Move.com site, a property-search portal that allows users to search for new homes, existing homes and rentals, has been roughly flat since its launch three months ago, Long said.
This may be due, in part, to the ability of search engines to respond to the site, changes made at a major real estate portal that sends consumer traffic to Move.com, and the slowing housing market, Long said.
“New-home construction and buyer interest has fallen quite dramatically,” Long said, and ” one of our major portal partners restructured their house and home channel (Web site), and that had the unintentional effect of reducing traffic from that partner.”
Even so, Long said that Move sites have seen an increase in the number of repeat visitors, and “we have dramatically expanded our real estate listings content,” as the site transitions away from a pay-to-list model for new homes and rental properties to a cost-per-click model.
The company also has plans to roll out auction-based pricing for ads at its search sites.
Overall traffic to real estate sites “may have peaked” with the slowing market, though Long said the consumer traffic that remains becomes more valuable to real estate professionals in a slowing market – “it creates more competition for less traffic.”
While some newspapers have seen recent growth in income from real estate-related advertising, Long said, “We think that this is a last gasp of a model that is in decline,” as overall ad spending shifts from offline to online venues.
The company is testing an advertising campaign for the Move brand in several markets across the country, and the campaign will include billboard, television and newspaper ads in Oklahoma City, Portland, Des Moines and Jacksonville, among other markets.
Lew Belote, chief financial officer for Move, said that the company added more new ad customers in second-quarter 2006 than it had in any of the past 10 quarters. The company in May launched a comparative market analysis product that allows subscribing real estate professionals to link up with consumers at Realtor.com.
Belote said that another “sophisticated market analysis” product began testing this week in Seattle and Orange County markets.
Excluding stock-based compensation expense, net income would have been $4.3 million in second-quarter 2006, Move reported. Total revenue for the second quarter was $73.9 million, up 17 percent from total revenue in second-quarter 2005.
Net income applicable to common stockholders for the second quarter of 2006 was 1 cent per share, compared to net income of 2 cents per share in second-quarter 2005. Excluding stock-based compensation expense, net income would have been $4.3 million for the second quarter of 2006.
Move stock closed at $4.51 per share Thursday, up from $4.27 when the market opened.
Move’s EBITDA (earnings before interest, restructuring charges and certain other non-cash and non-recurring items, principally stock-based charges, depreciation, and amortization) for the second quarter of 2006 was $4.7 million, compared to $2.9 million for the second quarter of 2005.
EBITDA in second quarter of 2005 included $4.2 million in expense related to the company’s obligation to advance the defense costs of former officers.
EBITDA for the year should be slightly better than in 2005, Belote said.
A replay of the company’s second-quarter earnings conference call will be available at the “Event Calendar” section of the company’s http://investor.Move.com Web site after 5 p.m. PDT, and a telephone replay of the call will be available from 5 p.m. PDT to midnight PDT Aug. 10 at (888) 286-8010, conference ID 31160907.
Move’s Form 10-Q for the quarter ended June 30, 2006 is expected to be filed with the Securities and Exchange Commission on or before Aug. 7.
