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Amid talks with CoStar Group about a potential sale of Realtor.com parent company Move Inc., News Corp revenue dropped in the final quarter of 2022, with plans to shed an estimated 1,250 jobs, the company said Thursday.
Revenues from real estate sales and referrals fell during the quarter, a three-month stretch that saw Move revenue fall $23 million, or 14 percent, driven by the broader real estate slowdown.
News Corp, which owns Dow Jones, The Wall Street Journal, and other media companies across the world, said that discussions about a possible $3 billion sale of Move are still underway, but declined to provide much of an update on the potential deal.
“In terms of portfolio optimization, as publicly reported, we have been actively engaged in discussions with CoStar Group about a potential sale of Move,” News Corp said in its earnings report. “Any transaction would be designed to create shareholder value and strengthen Realtor.com’s competitive position.”
“However,” it added, “there is no assurance regarding the timing or completion of any transaction.”
The company said real estate and publishing were hit “particularly hard” in the quarter, before announcing a company-wide reduction in head count.
“We will be reducing head count across the company by 5 percent,” said Robert Thomson, News Corp CEO. “That is a necessary response given these macro conditions.”
That amounts to about 1,250 employees, Reuters reported. Thomson didn’t elaborate on whether any departments or subsidiaries would be hit harder than others.
Thomson said he believed rates had peaked and that the next cycle of the real estate market was “not far away.”
He said revenue per lead grew, and that Realtor.com would focus on increasing revenue from sell-side listings.
“We now are increasing our emphasis on the monetization of sell-side listings, as inventory time on market has increased significantly in recent months,” Thomson said. “And we will be able to provide Realtors and vendors with improved service.”
The sale to CoStar would come at a time of slower real estate transactions and associated activities, like referrals, that drive revenue for Realtor.com.
News Corp would be shedding Realtor.com at a time when real estate sales have slowed significantly. CoStar would be picking up an international brand at a time when it’s seeking to create a residential real estate business on par with Zillow and other digital giants.
Move’s revenues during the final three months of the year fell to $146 million. The company reported earning $678 million in 2022, according to a tally of the past four quarter filings by News Corp. (News Corp’s fiscal year doesn’t align with the calendar year, so this earnings report was the company’s second quarter, rather than the fourth.)
Real estate activities represent about 86 percent of all Move revenues, the company said in a recent filing.
The company pointed to a $25 million drop in real estate related activities, which it said was driven by the “impact of the macroeconomic environment on the housing market, including higher household interest rates, which has led to lower lead and transaction volumes.”
Move’s referral model, which includes ReadConnect Concierge, along with its other lead generation products dropped in the quarter, the company said.
Referrals accounted for 27 percent of all Move revenue in the quarter, which is down from 32 percent the year before.
“Based on Move’s internal data, average monthly unique users of Realtor.com’s web and mobile sites for the fiscal second quarter declined 23 percent year-over-year to 66 million,” the company reported. “Lead volume declined 37 percent.”
