Business
. LOOP’s online marketplace enables commercial real estate agents, working on behalf
of property owners and landlords,
. To list properties for sale or for lease and submit detailed information on property
listings including qualitative descriptions, financial and tenant information, photographs
and key property characteristics in order to find a buyer or tenant.
. In October 2004 acquired BizBuySell
Revenue sources
. LoopNet premium membership fees;
. BizBuySell BrokerWorks membership fees and paid listings;
. LoopLink product license fees;
. Advertising and lead generation
Two types of memberships
. Basic -- available free-of-charge, and enables members to experience
some of the benefits of the LoopNet offering, with limited functionality.
. Premium -- available for a monthly subscription fee and provides
enhanced marketing exposure for property listings and full access to LoopNet property
listings, as well as other features. The minimum term of a premium membership
subscription is one month.
Fee structure
. LoopNet premium members is currently $49.95 per month, discounted to $44.95 per
month for a quarterly membership and $39.95 per month for an annual membership, with
each paid in advance for the subscription period.
. The minimum term of a premium membership subscription is one month. A customer
choosing to cancel a discounted annual or quarterly membership will receive a refund
based on the number of months the membership was used and charging the customer at
the monthly rate rather than at the discounted quarterly or annual rates.
. Also licenses the LoopLink product to commercial real estate brokerage firms who pay a
monthly, quarterly or annual fee. For LOOP’s BrokerWorks product at BizBuySell, LOOP
charges $39.95 per month. Also charges fees associated with marketing individual
businesses listed on BizBuySell.
Metrics
Membership
. Total membership has grown from approximately 449,000 members as of December 31,
2003 to over 1.1 million members as of December 31, 2005 and over 1.2 million
members as of March 31, 2006.
. Base of premium members has grown from over 21,000 premium members as of
December 31, 2003 to over 57,000 premium members as of December 31, 2005 and
over 64,000 premium members as of March 31, 2006.
Conversion
. Historically, the average monthly rate of conversion of basic members to premium
members has been five percent, and average monthly cancellation rate for premium
members has ranged between three and five percent.
Premium membership fees
. Premium membership fees have driven the majority of growth in revenues since
2001 and were the source of approximately 80% of revenues in 2005 and in the three
months ended March 31, 2006.
Listings
. The number of listings on LOOP’s marketplace has grown from 224,000 as of
December 31, 2003 to 335,000 as of December 31, 2005 and 360,000 as of March 31,
2006.
Competition
. Competes with CoStar, a provider of information and research services to the
commercial real estate market. Some of the services that CoStar offers directly compete
with LOOP’s product offering. For example, CoStar provides commercial real estate for
sale and for lease property listings which compete directly with LOOP’s online
commercial real estate marketplace.
. Several companies, such as Cityfeet.com and Property Line International, have created
online property listing services that compete with LOOP. These companies aggregate
property listings obtained through various sources, including from commercial real estate
agents and, in the case of Cityfeet.com, classified advertising from newspaper publishers
with whom it partners. Cityfeet.com provides the listings presented on the commercial
real estate section of Yahoo!’s website.
. In addition, newspapers such as the Wall Street Journal and American City Business
Journals include on their websites listings of commercial real estate for sale and for
lease.
. In the past, the National Association of REALTORS©, or NAR, its local boards of
REALTORS©, affiliates such as CCIM, and other third parties have created commercial
real estate information and listing services in partnership with companies such as Catylist
Real Estate Software, Inc. and Xceligent, Inc. These services, if they succeed in
attracting a significant number of commercial real estate transaction participants, could
provide commercial real estate for sale and for lease property listings which compete
directly with LOOP’s online commercial real estate marketplace.
. Companies such as eBay, craigslist, inc. and Yahoo! provide commercial real estate
listing or advertising services in addition to a wide variety of other products or services.
eBay and craigslist operate real estate listing services which include commercial real
estate and operating businesses.
. Yahoo! operates a commercial real estate listing service with for sale and for lease
listings provided by Cityfeet.com. Other large Internet companies that have large user
bases, such as Google and Microsoft, have recently launched classified listing services
which could be used to market and search for commercial real estate property listings.
Use of $42mm in IPO proceeds from sale of 4mm shares
(shareholders intend to offer 2mm shares)
No current specific plan for the use of the proceeds