We broke the news yesterday that Move, Inc. CEO, Steve Berkowitz would be replaced with a News Corp insider, Ryan O’Hara after ushering in a nearly $1B aquisition by a major media player. O’Hara takes the reigns on January 5, 2015, which Berkowitz says gives the industry time over the holidays to digest.
The biggest questions are about timing, what’s next for Berkowitz, and how big was the severance package?
Why name a new CEO before the holidays?
First, News Corp and Move, Inc. have barely been together for a month, and they’re already making changes at the top level, which Berkowitz said he “always knew was a possiblity,” and is a “natural event,” likening it to a new owner buying a baseball team and bringing in new blood. What is his next move? He says he doesn’t know, but he’d like to serve on some boards given his deep industry insight and the political situations he’s endured (our word, not his).
So why now? Berkowitz says “News Corp wants to run quickly, they want to make the company number one, and I agree with that,” later noting that “Speed is important. This gives everyone the holidays to get used to the idea.” All staff learned of the change of power the moment we did yesterday.
Has Zillow made him an offer after attracting some of his own top talent this year? He chuckled and said, “no, they have not.”
What’s next for Berkowitz?
This isn’t the first time Berkowitz has been in this spot, in fact, as a CEO, he took AskJeeves from a company with a $40M cap, and turned it around quickly to sell for $2B. He remained CEO for a year after the acquisition, but there was an eventual change of power. He’s done the same at Move, Inc. which had a $250M market cap, selling just short of one billion dollars.
With Move, he says he committed to a goal and has met his goals for Move, Inc. and from day one was “willing to do what News Corp. needed” of him. He calls this a “sad but proud” moment in his life, sad to leave behind his many employees, but proud to have accomplished so much.
Berkowitz notes he loves this industry but isn’t convinced he’ll stay in real estate. That said, he does have a unique perspective that others could benefit from, but he says it won’t be his competitors. “If anybody could gain the most from my perspective, it’s actually the industry itself. If you ask me who i could give the best counsel to, it wouldn’t be my competitors, it would be the brokers, MLSs, people in the industry.”
He’s one of those rare execs who wants to work for a board of directors and balance investors, constituencies, and team development.
What does Berkowitz’ severance package look like?
Many readers asked us about Berkowitz’ compensation, with many not aware that in publicly traded companies, severance packages are determined upon hire and made public.
According to a U.S. Securities and Exchange Commission filing, Berkowitz’ “Severance Agreement” is as follows:
- He shall receive all salary and benefits earned through the end of the transition period which will last 90 days.
- He shall receive an amount equal to the sum of (i) 12 months of his then current annual base salary and (ii) 100% of the target bonus that would otherwise be payable for the fiscal year in which his termination occurs (whether or not he has satisfied the applicable performance objectives), payable in 12 equal monthly installments.
- Effective January 5, 2015, 100% of all of his outstanding stock options, restricted stock and performance-based restricted stock units shall vest and all of the outstanding options shall remain exercisable for a period ending on the earlier of (i) three years following a transition period or three years following termination if the Company does not request a transition period or (ii) the normal expiration of the options.
- Move will pay all of the COBRA premiums for the same or reasonably similar medical coverage that Mr. Berkowitz and his dependents had, for a period not to exceed the earlier of 18 months or until he becomes eligible for coverage at a new employer.
The legacy Berkowitz leaves behind
There are three parts of any leader’s legacy – their perception of their legacy, others’ perception of their legacy, and history’s perception of their legacy.
Berkowitz is proud of his legacy and says that instead of “we’ll miss you” notes and calls, he’s getting “you’ve earned this” notes and “you’ve done great things” calls from staff and industry insiders, which makes him extremely “proud” of what he and his team have done. And in a very rare move, he got dozens of notes from investors thanking and congratulating him when Move was acquired.
He has consistently led from behind the scenes (“I don’t have a need to be center stage”), empowering his team to be out front, making decisions. His sweet spot is building, and he tells us, “I love building a company, I love building the culture.”
“When I look at myself and think about what I’ve accomplished, I try to be realistic about it and try to see what other see. For me, it’s always about putting the right people out there,” Berkowitz tells us, adding “I’m so proud of the culture I’ve built here.”
Berkowitz is not without critics, in fact, he’s earned a few enemies during his time at Move. Recently, Move lost some top talent in a controversial talent grab by Zillow, following a tough product launch and immediate death (AgentMatch) which was even more controversial. During his tenure, he has been referred to as tone deaf, and unwilling to change.
When asked about what we’re calling the “dark times,” Berkowitz said, “I believe everything works out for the best. I don’t consider them dark times. I consider them events that made the company better at the end of the day. The company today as a leadership team is more connected, sounder than it’s ever been. Our relationship with the industry has never been stronger.”
He says his top regret is that he needed to push the industry conversation earlier. “From internal execution and from an industry partnership perspective, we needed to move faster. It was a battle. The outcome is great, but if I could push back two years, I’d like this to be year five, not year six. We gave our competitors a little too much runway, but we had lots of things to clean up.”
During his tenure, he did work with NAR to loosen their operating agreement, so many hands that were once tied behind backs have been loosened, paving the path for a more successful realtor.com, even if under different leadership.
Berkowitz concluded, “Yesterday was an extremely positive day, not because of the announcement, but because of the feedback I got from the people (not ‘I wish you well,’ but heartfelt ‘thank yous’). I talked to over 30 people, meet with people down in the trenches, and that’s the feedback I got – ‘you understand what I did, made my job better, taught me,’ and that’s the role of the CEO.”
News Corp performing well, led by 35% growth at Move, Inc.
More buyers will use the Internet than agents and even the home buyers using agents still use the Internet to supplement their home search. As the old saying goes, “It’s good to be king.” And right now, News Corp finds itself in the enviable position of being “the world’s largest player” in online real estate.
More buyers will use the Internet than agents and even the home buyers using agents still use the Internet to supplement their home search.
As the old saying goes, “It’s good to be king.” And right now, News Corp, which in November 2014 purchased Move Inc., which in turn operates Realtor.com for the National Association of Realtors, finds itself in the enviable position of being “the world’s largest player” in online real estate.
Internet use on the increase
Lest you think online real estate is some pseudo term that looks impressive on paper but nothing in real life than think again. According to the National Association of Realtors, “nearly 74% of home buyers polled answered that they would use the Internet as part of their home search.” Think about the significance of this in terms of growth: More buyers will use the Internet than agents and even the home buyers using agents still use the Internet to supplement their home search. NAR points out further that “while online real estate research sites have not put real estate agents out of business, they have taken viewers away from the old traditional sources of information.”
This increased use of the internet as a real estate tool has fueled the growth of Realtor.com and as a result explains an article in businesswire.com, “News Corp is evolving rapidly into a more digital and increasingly global company with a diverse revenue mix that will drive long-term growth in profits and shareholder returns.”
News Corp Chief Executive Officer Robert Thomson proudly remarked that “The Company is, by most measures, the world’s largest player in digital real estate, a position certainly enhanced by the rapid growth in the U.S. of realtor.com.”
To the victor goes the spoils
News Corp said that the growth was driven by 57% growth in mobile users. News Corp also said that Realtor.com’s traffic accelerated in January to 50 million monthly unique users, or 34% growth year-over-year.
More specifically, in the second quarter, Move’s revenues increased 35% on a stand-alone basis to $87 million from $65 million in the prior year.
Not only that, based on Move’s internal data, average monthly unique users of realtor.com’s web and mobile sites for the quarter grew 37% year-over-year to approximately 39 million, which was driven by 57% growth in mobile users. Further, traffic accelerated in January to 50 million monthly unique users, or 34% growth year-over-year.
Coulda been a contender
Depending on which side of the river you want to water your horse, Zillow (which has been Realtor.com’s main competition for like, ever) claims that it actually represents more than 70% market share of all mobile-exclusive visitors to the real estate category. This despite a July 2015 report from Barclay’s that states Zillow is experiencing slow traffic growth due to a “function of audience saturation and new competition.
Comparatively, recent comScore data also showed that Realtor.com’s traffic in June 2015 surpassed Trulia’s traffic for the first time in two years.
Superficially it seems like tit-for-tat, but the truth is, competition is good for the real estate marketplace and for the time being, realtor.com is wearing the crown.
For the first time ever, realtor.com will pipe in third party real estate agent ratings and reviews
Realtor ratings is a hot button issue, but NAR has set standards, and realtor.com announces how they’re meeting, perhaps exceeding those standards.
Finding an agent is a big challenge for consumers, and offering some semblance of accuracy in ratings and reviews is a tremendous challenge for real estate search sites – a challenge that has a long, convoluted history. Today, realtor.com is announcing their next move, confident that they’re appealing to both consumers and industry insiders, in yet another push to assert the superiority of their offering.
They’ve inked agreements to integrate content from Quality Service Certification, Inc. (QSC), RealSatisfied, and Testimonial Tree to agent profiles on realtor.com®, becoming the first online real estate website to offer a consolidated view of reliable information for consumers researching potential agents online.
Adhering to stringent policies
The information will appear on realtor.com’s revamped agent profiles and ratings and reviews system, offering very specific data. In fact, they’re the first to base these standards on the National Association of Realtors (NAR) guidelines for professional evaluation, established last year. The ultimate goal is to insure that ratings and reviews are by clients who have closed a transaction with a particular Realtor only – they say they’re the only real estate search portal to offer this.
One source tells us that the realtor.com policies were so stringent, that it was actually a struggle to find any vendors that met their standards.
Separately, the system allows a recommendation section which can be provided by colleagues, friends, and so forth. In a statement, realtor.com states, “The combined system provides a standard for transaction-based information while allowing all agents to showcase their professionalism.”
The industry has demanded a solution
“Buyers and sellers of homes rely on an agent with one of the biggest investments in their lives, and they spend inordinate amounts of time doing their due diligence to select someone they can feel confident about,” said Tapan Bhat, chief product officer at Move. “It’s important for them to have a resource they can trust – one that offers consistent quantifiable metrics around an agent’s performance and that provides a clear and reliable portrayal of the qualitative aspects as well.”
“Brokers and agents have consistently communicated that they want and need a solution that allows them to easily syndicate the ratings and recommendations they collect as part of their customer satisfaction programs,” said Jeff Turner, president of RealSatisfied. “From the very beginning, realtor.com® has supported this notion and their decision to continue to support this as part of their new platform is a testament to their forward-thinking approach to agent performance evaluation data. We are proud to be a part of this solution.”
Leveraging the abundance of data
In a press release, the company notes, “Leveraging the abundance of reliable data collected by trusted affiliates while carefully managing the integrity of the new solution was no small challenge. The integration of third-party, transaction-based ratings and reviews content into the realtor.com® system is made possible by matching the external data to the criteria established by realtor.com® for display where possible.”
QSC has decades of experience as a proactive performance management platform that helps brokers spot agent performance issues early. Realtor.com calls the affiliation a “natural fit,” having over 1.5 million surveys in the field to date – today more than 95 percent of buyers and sellers are ‘satisfied or very satisfied’ with agents participating in QSC’s program, including 84 percent that are very satisfied, compared to a national average of approximately 58 percent.
“QSC was the first to offer consumers reliable information to make better, more informed decisions by collecting feedback only from real customers and after every closed transaction,” said Kevin Romito, president and COO of QSC. “Through this agreement, realtor.com® will provide millions of consumers access to a level of accuracy and transparency not available anywhere else, and for participating brokers and agents, this will be a powerful differentiator and competitive advantage.”
Realtor.com®’s recent agreement with Testimonial Tree will enable testimonials collected by real estate professionals to be integrated within recommendations at realtor.com®, and adds a social element to agents’ profiles.
R.com expects this to increase leads for agents
As credible and reliable content makes its way onto the realtor.com® profile platform over the coming months from these partners and through realtor.com®’s built-in evaluation system, the company expects to see a boost in traffic, engagement and high quality leads for agents.
“The resulting virtuous circle of visibility, combined with the reliability of the content we are gathering, fulfills our vision for this solution: to meet the needs of the consumer for a trustworthy resource while addressing the complexities of the industry which we are uniquely positioned to understand,” said Bhat. “We are delivering a solution that works – not just today, but for the years ahead.”
STORY UPDATE: It is important to note that Real Satisfied and Testimonial Tree are feeding the recommendations section, and QSC is feeding the ratings and reviews.
Have you seen realtor.com’s aggressively anti-Zillow ad campaign?
For years, real estate listings sites have fought about who’s more accurate, but realtor.com is taking the fight to consumers to help them understand the urgency of data accuracy.
While many brands allude gently to their competitors, or simply call themselves the best, realtor.com is going for their competitor’s jugular, tapping into the real estate industry’s concern regarding listing accuracy, presenting it to consumers in a visually meaningful way.
Today, the company wrapped a real home for sale in Austin, Texas, leaving a giant blank spot on the block, asserting that if you only search Zillow, you may be missing out on y our dream home. The experential ad is part of a broader, ballsy campaign wherein realtor.com appears hellbent to finally illustrate the value of accuracy in listing data.
Drawing attention to accuracy
Realtor.com says that their campaign is based on statistical analysis from October, which estimates that they have 20 percent more MLS-listed for-sale homes than Zillow. They note that the gap is much bigger in some markets than others.
To further illustrate their “listings advantage,” they’ve offered some data to back up their claims:
“Buying a home is one of the biggest commitments many of us will ever make, so it’s not a decision we enter into lightly,” said Nate Johnson, chief marketing officer for realtor.com®. “This advertising campaign draws attention to the fact that, unlike our competitors, realtor.com® provides the most comprehensive view of MLS-listed, for-sale homes.”
Digital and static ads will also run
The home will remain wrapped through Saturday, and they’ll also be running these digital ads:
In addition to the digital ads, static ads on major sites and platforms from Google and Curbed to Spotify and Twitter. The ads feature headlines such as:
- “There are more homes for sale than Zillow’s showing you. Realtor.com® – search more homes for sale”
- “If you’re looking to buy your perfect home, Zillow might not have it. Realtor.com® – search more homes for sale”
- “More homes on realtor.com® means more homes that could be yours. Realtor.com® – search more homes for sale”
If you thought changing their logo to red was aggressive, we’re betting this is yet another move away from the soft, friendly brand. Under new ownership, they’re clearly serious about connecting with consumers and planting their flag.
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