A new partnership between eBay (EBAY) and HomeSeekers.com (HMSK) is expected to greatly expand the auction site's real estate listings, generate more revenues for struggling HomeSeekers and potentially shake up the online real estate market.
On Thursday, the same day of its second-quarter earnings call, HomeSeekers announced that realtors visiting its site will be able to advertise home listings on eBay's expanded real estate section, slated to debut in April. It will cost $50 to place a listing, with an additional $150 due upon the property being sold. In addition, eBay will offer six "preferred" slots on its site for each of the 70 communities that the site will serve. Each slot will cost $5,000 and include 25 home listings in that community. Ultimately, the new section is slated to feature 300 communities throughout the U.S.
"If at the end of the game we have 100,000 listings at eBay that would be a great success for us and a good success for agents," said HomeSeekers CEO John Giaimo.
The deal involves revenue sharing, but the companies declined to disclose details.
HomeSeekers, which lists 1 million properties on its site for free, reports that realtors already are clamoring to sign up for a paid spot on eBay. Giaimo is confident that listings on eBay will be a huge draw for realtors because of the online auctioneer's name-recognition among consumers.
"All of us have spent tons of dollars trying to market and brand ourselves, but it doesn't resonate with the consumer," said Giaimo, who believes that HomeSeekers competitor Homestore.com (HOMS), with its flagship site Realtor.com, as well as Microsoft (MSFT)'s HomeAdvisor.com, are in the same boat.
The HomeSeekers-eBay alliance will give realtors exposure to eBay's massive audience of 9.5 million unique visitors, according to Media Metrix's most recent count in December. The average home listing on eBay's current real estate section, which as of yet has received little marketing attention, receives 1,800 views in a 10-day period. By comparison, Homestore, the top online real estate company with more than 1.4 million home listings, counts 4.3 million unique visitors per month.
"EBay could pose a significant threat to [Homestore's] business," said Nick Karris, a senior analyst at Gomez.com who covers online real estate. He said eBay has an opportunity to rival Homestore's attempt to be a one-stop shop for home buyers and home owners, but in a unique way. "Imagine you're selling your home and you have excess furniture," he said, pointing out that eBay offers a "virtual yard sale" in addition to the new listing service.
HomeSeekers, which already has 220,000 real estate agents who use its Web hosting, multiple-listing and desktop product services, will add eBay to its offerings as a result of Thursday's deal. Initially, HomeSeekers and eBay will team up only on offering advertising, but they eventually plan to offer a bidding option, which unlike all other bids on eBay would not be binding.
EBay decided to expand its real estate section after realizing that the section already was generating substantial revenues with little work, according to Richard Rock, general manager of eBay Real Estate. "Our customers were actually listing property for sale on the site even before we knew it," Rock said in an interview last year. The section, which Rock says is already profitable, currently hosts 690 listings.
While eBay is enthusiastic about the HomeSeekers deal, it holds far more significance for HomeSeekers. The company, whose stock is trading at less than $1 and faces delisting from the Nasdaq, has had to dip into a $4 million line of credit received in December in order to stay afloat. The company had only $2.4 million in current assets on its balance sheet as of Dec. 31, but cut its burn rate by a whopping 66 percent to $1.6 million in the second quarter and expects to be profitable by the quarter ending in June.
