Richard Boyle, president and CEO of LoopNet, is on a quest to draw more brokers, investors and tenants into the bustling commercial real estate marketplace known asloopnet.com. His 10-year-old company, which raised $72 million in its June IPO, now boasts one of the largest online listing databases for commercial real estate. With $335 billion in commercial real estate listings, LoopNet's total number of registered members reached 1.4 million at mid-year, a 57% increase from a year ago. Boyle recently spoke with NREI on how LoopNet is luring more real estate players into the digital fold.
NREI: LoopNet has spent the past 10 years as a private firm. What drove the decision to go public?
Boyle: We felt that being a public company would help us establish our next wave of growth, plus allow us to build the overall listings service. The IPO will also help us invest in ways to integrate many new services into our technology platform. The company was already growing before we went public, of course, but this will speed up the process.
NREI: Tell us what new technologies you are developing and how they will help your clients use LoopNet.
Boyle: Our new map search tools are really cool. Most of this stuff is still in beta testing, but we believe this is state-of-the-art. What we've done is similar to Google Earth, which provides detailed map images of the entire planet, and we've integrated it into our listings service. The idea is that you can call up a map and overlay listings on the map to see the properties in an aerial fashion. We think this is light years ahead of what's being done in the commercial real estate space now. We expect to release this technology later this year.
We're also very proud of our RecentSales service, which we launched in March. This service allows our clients to get the most up-to-date information on more than 425,000 properties that have been bought or sold recently. We're growing that number, too. Our clients were asking us for this comps service, so we're happy to offer it. With RecentSales, too, we can get key transaction data onto the site as soon as 15 days after the deal has closed.
NREI: You've called LoopNet a “search engine for commercial real estate.” Can you elaborate on that point?
Boyle: We now have the tools to index and aggregate data on so many different properties that all a user needs to do is punch in a name. Let's say they are looking to buy a Rite-Aid [drug store]. They will see thousands of Rite-Aids for sale across the country, if they just punch in those search terms.
NREI: Are you incorporating advertising into your revenue model?
Boyle: We are experimenting with some new advertising services similar to the Google model. Depending on what people are searching for, we can change the ads to become targeted advertising spots. But 80% of our revenues are derived from premium membership [the monthly fee paid by an individual agency or professional]. Advertising is a small part of the revenues now, but we've had great demand by advertisers asking us to do more.
NREI: Are Google and Microsoft breathing down your neck? There are rumors that both companies are eying the real estate listings side of the business.
Boyle: It's true that some of the big players [like Google and Microsoft] have announced plans to develop broad, generic classified services. But they haven't gotten any traction on the real estate side. It's a lack of focus on their part. But, if Google made an announcement that it wanted to get into this business, it would be a formidable competitor.