?Give ?em A Chance?

February 5, 2002

Jesperson, Games, Rouda Offer Homestore?s New Management Some Advice

By Bridget McCrea
Inman News Features

It?s far from clear how Homestore.com?s new CEO Michael Long and company will tackle the task of righting the troubled real estate dot-com and technology company, which has been rocked by earnings restatements, shareholder lawsuits and a stock price that closed at $1.41 today.

But Stephen Games, CEO of Prudential California Realty in Southern California, has some advice for real estate brokers and agents who are watching the drama unfold: "Give the new guys a chance."

"I met with them personally," said Games. "Michael Long is a talented guy who has come into a tough position. I want to give him a chance to get the organization on its feet and running to the advantage of all real estate agents and brokers."

In addition to Long, the "new guys" now at the helm of the Westlake Village, Calif.-based operator of Realtor.com and other homes Web sites are Chairman Joe Hanauer, COO Jack D. Dennison and CFO Lewis R. Belote III. Long, Dennison and Belote, who replaced recently resigned CEO Stuart Wolff and others, come to Homestore from past careers at WebMD, Healtheon Corp., The Continuum Co. and Computer Sciences Corp.

But Harley Rouda Jr., CEO and general counsel of HER Realtors in Columbus, Ohio, hinted he might not be as quick to embrace the new team.

"It?s a high-powered group with backgrounds in Internet plays, but I?m not so sure WebMD was that successful either," said Rouda. "It?s still questionable as to whether they bring the right skill set needed to get Homestore headed in the right direction."

Daryl Jesperson, president of RE/MAX International in Greenwood Village, Colo., said he?s pleased with the "rapid changes that Homestore?s board of directors instituted," and he believes the new group more closely defines the struggling firm?s direction.

Jesperson singled out Joe Hanauer as a respected icon in the real estate industry.

"Stuart Wolff had the talents and skills necessary to start up an entrepreneurial, technology venture," Jesperson said, "but (they) needed someone (else) to take Homestore to the next level--someone who understands not just technology, but also the nuances of the real estate industry."

Jesperson also he hopes the "new" company won?t move into non-core activities like the ill-fated Firetap that shut down in June. Firetap was a Homestore.com joint venture with the National Association of Realtors that was formed to sell branded telecommunication services.

"Homestore paid a lot of money for Firetap," said Jesperson. "But before it even got up and running, it was out of business."

Games hopes Homestore?s new management will focus more on the industry and less on the company?s stock market valuation.

"The single most important component of the real estate transaction is the real estate agent," said Games. "And while technology certainly needs to be integrated, it needs to be done with an ear that?s listening not to the stock market, but to people who understand the business."

Games said Prudential California Realty brokers and agents have been frustrated for years with Realtor.com?s technological glitches.

"It was the only game in town, so we felt like we had to participate," said Games. "All of my (company?s) Realtors are hoping (Realtor.com) will improve its product and facilitate their getting the mass leads created through (Realtor.com?s) position in the marketplace."

Rouda is less optimistic that that will happen. But he said the bigger issue is whether Realtor.com can compete with Internet Data Exchange (IDX) systems that now allow individual brokers to post an MLS? entire listing inventory on their individual Web sites.

"With broker reciprocity, the need for a national aggregator is dramatically reduced," said Rouda, whose offices have used such systems for three years. "That?s definitely going to drive Homestore to rethink its overall business model."

NAR 2002 President Martin Edwards Jr. recently stated that the group is "encouraged that Homestore's board of directors has appointed a new management team to take control at this critical time."

That support may go beyond encouraging words. In a Jan. 2 statement, Edwards said NAR would "spare no efforts to ensure Realtor.com's continued success."

But Rouda doesn?t believe NAR?s support of Homestore should be "any more or any less" than the support the 800,000-member group gives "any other for-profit organization."

"Hopefully, NAR would not consider direct investment into Homestore beyond its current participation," he said.

Games gives NAR the same "give ?em a chance" advice he?s asking others in the industry to follow.

"Let?s see what comes out," he said, "and let?s pay more attention--not less--to what Homestore is doing on our behalf."

Copyright: Inman News Service

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