Move.com Tried to Buy ActiveRain
by Kevin Steele
Watch out! Catfight breaking out!
Earlier this year, ActiveRain, the popular social networking site for Realtors, was about to be acquired by Move.com, the owners of Realtor.com. Right at the eleventh hour however, Move.com pulled out of the deal.
All of this has come out in a lawsuit that is detailed in today’s Inman News.
Terms of the original deal are unclear, but ActiveRain is now seeking $33 million in damages and alleges Move.com stole “confidential information” that it is using it to create and maintain the new Realtor.com blog network.
This is a big deal for Move if they lose. They will probably come out of it with a little egg on their face and the damages are likely more than they would have had to pay for ActiveRain in the first place.
ActiveRain is not without some risk with this news getting out either. The ActiveRain community may not be so happy to hear the owners were that close to selling out. I wonder how the community would have reacted when it woke up and found out it had just been acquired by Move.
Ultimately, this lawsuit raises an important question you should be asking yourself. Just who owns your content online?
Thousands of real estate professionals have moved their conversations online over the last year as blogging has become more and more popular and has become an important part of a Realtor’s marketing arsenal.
Don’t be fooled, your content is very valuable. Platforms like ActiveRain, Trulia Voices, Zillow Q&A all seek to tap this knowledge base and build massive databases which they hope to monetize. ActiveRain’s near-acquisition shows just how much your words can be worth.
On the flip side, and mostly because of the communities that have developed around these sites, people start to feel very personally attached to their blogs, their profiles, whatever. They start to feel like it’s their own little corner of the Web.
But remember – at the end of the day – on any of those sites, your words aren’t yours.
What you gain in terms of Google Juice and traffic, you lose in control. The bottom line is your content rests in someone else’s hands.
Now I’m not suggesting you don’t participate in these sites. In fact, quite the opposite. The trade off could very well be worth it. I’m simply suggesting you think about the long term implications.
A site may have all the best intentions in the world and spell out truly honorable Terms & Conditions. But what happens when they fold, merge or are acquired by a third party? You may not like where those words end up. This holds true no matter what kind of information you’re putting online.
All of this reminds me of wise words I once heard from a buddy in college – Don’t go to bed with someone you don’t really know, you may not like who you wake up with.
Update: Active Rain has posted copies of the original filing and Move’s response on their web site. It looks like Move offered AR $30 million cash and extended employment offers to 3 of AR’s executives, which they, in principle, accepted. Move apparently killed the deal once it had gotten its hands on the ActiveRain member list and contact information. Ugh – this is nasty all around. Also I’m not sure I like that my information (I have an AR account) was shared without my consent – where is AR’s privacy policy?
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25 Comment(s)
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Agent Scoreboard | Sep 27, 2007 | Reply
Its really not that surprising. Its fairly typical for a larger player to hold out the carrot of big bucks to see what a smaller competitor has under the hood, and pull out if the cost vs. build equation doesn’t make sense.
There is no rocket science to Active Rain, they were in the right place at the right time, with the right product.
Since M&A is my background, I’m not so sure AR has a chance except to win some sort of nuisance payoff. Actually, I’m quite surprised that they are asserting that it was getting “hands on member list” that made Move call it off, since their member list is already out there and someone with rather limited technology can spider the whole damn site. In fact you can suck off most of the posts via RSS. So I don’t know if that claim is genuine. The suit might just be a face-saving move.
Of course the real test here will be when AR has to show damages. Since they don’t really have a recognizable revenue model, claiming $30M in damages, would have to show that the boys over at Move had some intent prior to making the offer… good luck!
Kansas City Real Estate Agent | Sep 27, 2007 | Reply
“…you can suck off most of the posts via RSS”.
Exactly. Active Rain is a great site that many of us enjoy, but it could be duplicated hundreds of times over. If Active Rain ceased to exist, within a week there would be a new site offering virtually the same value proposition.
Also, if they were offered $30 million and can prove that, wouldn’t that determine the amount of damages at $30 million?? It sounds like they’d be better off performing and going through with the purchase.
Bonnie Erickson | Sep 27, 2007 | Reply
Regarding AR members being surprised that a sale was consummated. There are a number of the “old-timers” who have been anticipating this very kind of move for at least 9 months. As ads have been introduced, localism, etc., it’s been quite apparent that “free” would eventually be monetized for the founders, their success earned by using free content provided by thousands of unsuspecting participants.
Brian Brady | Sep 27, 2007 | Reply
“Its really not that surprising. Its fairly typical for a larger player to hold out the carrot of big bucks to see what a smaller competitor has under the hood, and pull out if the cost vs. build equation doesn’t make sense”
That assertion still doesn’t make it right.
Move made specific demands to Active Rain to cease doing business- then they dragged out the purchase to get the member roster. Whether it is relatively simple to get that roster or not is immaterial.
If this thing goes to jury, Move.com is going to look like the thieves and the boys at AR will appear to be underdogs. This thing will settle.
Agent Scoreboard | Sep 27, 2007 | Reply
Brian, I don’t know I read the complaint, pretty weak. Also pretty stupid, handing over confidential info with nothing more than an LOI?
Come on… Did they have someone representing them?
I would say public info is pretty material, since the burden will be on AR to show that the member list, which was supplied was the one was used by Move.
I too think Move will settle… no where near $30M. AR has to sue, but its too bad because that to is a exercise in wasting time and resources. AR may be done for. God I hope not!
Morgan | Sep 27, 2007 | Reply
This is exactly why I have my blog on my own hosting platform that I pay for and have 100% control. It’s not on blogspot, it’s not on typepad, it’s not on myspace. I have a blog on AR that I update with content that is also owned by me and published on my main blog at blownmortgage.com.
It just goes to show you that with out control your content really isn’t yours at all.
John Power | Sep 27, 2007 | Reply
Active Rain shouldn’t be selling. The impact will sent users to the next site that comes along.
Andrew | Sep 27, 2007 | Reply
They simply didn’t want it. Happens all the time. Why take it to trial when they should just focus on making the site better and hooking up with Move down the road. dumb move on AR’s part.
J. Towner | Sep 28, 2007 | Reply
So how much is enough…not the money..Apparently the correct answer is, there is never enough. How many more postings, opinions, sites, linkations, feeds etc can anyone absorb or respond to? How much more time can sales agents spend on ranting, bloviating, opinionating, etc?
Anyway, one of the reasons anyone builds a business is to sell it. Why would anyone be surprised that Active Rain wanted to cash out? This is something real estate agents seem to have a hard time doing because so much of their business value is their personality and style. Maybe the new internet tools will change this?
Well there I go doing what I am whining about..
Jonathan Dalton | Sep 28, 2007 | Reply
If AR goes away, so what? As Athol pointed out over on my blog, most of the old-timers have their own blogs on their own platforms at this stage of the game. If they post to AR, it’s to dupe the same content.
I saw RSS feeds mentioned earlier. Adding a feed reader cured my AR addiction in 30 seconds. Suddenly I could pull the best of what’s there and ignore the rest. If someone worth reading emerges, I’m sure I’d see it on another blog.
The bigger issue here from the agents’ standpoint is the realization that none of that content is your own. Morgan and Joel have it right. The only way you own your content is to host it yourself. Even RealTown has now gone the way of making it more clear just whose platform you’re using with the change in URL.
Ines | Sep 28, 2007 | Reply
Not “owning” my material is a HUGE wake up call for me. One thing is to expect AR to sell or the services to no longer be free and another all together is to realize you have no rights to your own articles.
Lenore Wilkas | Sep 28, 2007 | Reply
I don’t blame the AR people for placing a revenue stream on the site. It costs a bloody fortune to host something like that. California doesn’t look kindly on companies stealing proprietary information so if this makes it to trial it should be enlightening. I also agree it was stupid to provide this kind of stuff if they only had a LOI with the deal and no NDA but I can’t believe they would be that naive. Would they?
Bonnie Cox | Sep 28, 2007 | Reply
I was one of the very first participants on AR and it was apparent almost from the outset that this was being set up to be sold. Who was paying Matt and Caleb and one or two others? It certainly wasn’t the Realtors, mortgage lenders and title companies that blogged away. They had to have someone funding them with deep pockets with the idea of selling it if it were successful. It was wildly successful. I quit posting regularly on AR and now have a paid-for blogsite and the content is my own.
I am sure Internet Crusade and others are setting up for an exit strategy. These businesses are generally not being handed down to family members. I am also confident that wwwrealestateblogsites.com, where I have a paid for site, is also setting itself up to one day be sold. Advanced Access sold out to Dominion last year. Sadly, when the business sells, it is never the business that it was. When AR does find a buyer, and they will, it will not be the AR that we have come to know.
Bonnie Cox
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Glenn G | Sep 28, 2007 | Reply
The key issue or wake up call for real estate agents is “Don’t be fooled, your content is very valuable.”
As one looks around the AR site – you can only imagine the hundreds of hours spent by some of the users. The time and effort spent could have been used to enhance the content on their sites or blogs.
The RSS could have been used to create the same interaction to the benefit of their own blogs.
Real estate agents need to start thinking about their contributions to or on other sites/blogs.
Even with move.com, they will be building content for someone to create wealth – as the author of the article stated “I’m simply suggesting you think about the long term implications.”
Better words could not have been said.
It is true that some of the earlier contributors started to realize 1) the content posted was better served on our own sites or blogs and 2) AR would someday be sold and could be used against the real estate community.
Some real estate agents need to more closely look at the history of some of the latest behemoths to come on the stage – they may find that the founders found industries where the public or consumer could not easily see the value of the service and thereby created computerized systems to replace those professionals.
The real estate professionals should think – there is no free meal, without some consequences. Don’t be greedy for free – there is a price.
Agent Scoreboard | Sep 28, 2007 | Reply
Interesting that the conversation has turned to the “value of the postings” which really aren’t that valuable at all.
I think we maybe missing the alternative, just imagine there are 50,000 privately hosted blogs… how do consumers find you? Google, Yahoo, how do you rank high there when the better funded big boys like zillow and trulia can SEO your brains loose. Constantly updated content by a large cross-section of contributors made AR easy to find for consumers and everyone else, we all benefited..
“Owning” your content isn’t worth much if no one is reading it. If Localism would have taken off, that would have been a low cost lead generator to the participants.
IMHO, Consumers don’t seem to be all that interested in what realtors have to say, but for the ones that do, sites like AR make it easy to find what several local agents are saying, not just the one or two that can rank well.
I’d rather have my blogging fate in the hands of AR than Google…
disclaimer: i haven’t posted on AR in a while, forgive me..
Bill French | Sep 28, 2007 | Reply
“_The only way you own your content is to host it yourself._”
Not entirely true. MyST Blogsite hosts business and corporate blogsites for hundreds of clients including Intel, VeriSign, Pfizer and many real estate firms. Our terms of service doesn’t lay any claim to our client’s content or domains. In fact, the service and XML API is designed specifically to protect the client’s content, brand, and domain. MyST even provides access to copies of the client’s content for up to a year after service cancellation. We also provide web services to download 100% of the content at the client’s discretion 24/7.
bf
Roberta Murphy | Sep 29, 2007 | Reply
The probability of these conflicts and loss of control increases exponentially with proprietary software and platforms.
Hats off to Open Source–and three cheers for WordPress.
Dan | Oct 2, 2007 | Reply
What does that equate to in terms of cost per AR signup. $600?
Charles Richey | Oct 8, 2007 | Reply
I had put up a post a few months back about the dangers of relying on social networking (specifcally not owning the content) and the fact that large companies are buying up these sites. Can’t blame AR for selling, they have investors that are looking to see a profit from their investment. One of the reasons I haven’t been very active for the last several months.
Paul's Arizona new homes | Oct 29, 2007 | Reply
I can’t believe that AR would sell out and I can’t believe that Move.com would do such a thing. Bad business is bad for them and bad for us. Nobody will win.
Overland Park Real Estate | May 1, 2008 | Reply
Its been 7 months or so now, any updates? This really makes Move look bad IMO. Does’nt do much for AR either.
Michael Sosnowski | Nov 7, 2008 | Reply
I have always been a believer in hosting our own content on blog and website. I also don’t believe consumers flock to networks like AR. They, instead, do searches online for locations that interest them. Good blogs and website will be found – and you can compete with the giants. The only real purpose was for someone to make money from AR – in like all real estate portals, it was eventually going to be on the backs of realtors. What a surprise!
Laguna Niguel Real Estate | Jan 30, 2009 | Reply
That’d be a cool deal! I personally this Active Rain’s worth more than $30 million, though.
Billie Hillier | Jan 21, 2010 | Reply
I just stumbled on this looking through the archives. Does anyone know what the end result was?
Real Estate Living | Feb 3, 2010 | Reply
The key issue or wake up call for real estate agents is “Don’t be fooled, your content is very valuable.”
And I just agree with that line.