A Letter From Mike
|February 22, 2002|
Homestore CEO Thanks Realtors For "Offer Of Continued Future Support"
By Marcie Geffner
Inman News Features
Homestore.com?s new CEO W. Michael Long has written an open letter to Realtors, thanking them for their "offer of continued future support" for Realtor.com, the homes-for-sale Web site that Homestore operates for the 800,000-member National Association of Realtors.
"Dear Realtor," the letter begins. "I am writing to introduce myself as the new CEO of Homestore."
The letter then points to Homestore?s "long-standing partnership" with NAR and touts Realtor.com as "the largest and most comprehensive site on the Internet designed exclusively to keep you, the Realtor, at the center of the homeownership process."
Homestore?s new top executives have been pitching the Realtor-centric business strategy as if it were a new direction, but Realtor.com President Steve Ozonian said four months ago that the Web site operator had been turning its attention from creating consumer content to generating leads for Realtors.
The letter then states that Long and Ozonian "traveled more than 20,000 miles meeting with and listening to hundreds of customers" during the last 30 days. Realtors who met with the duo, Long wrote, "shared with us the successes of Realtor.com, the mistakes a fast-growing company like Homestore has made and some great ideas about how we can serve you better."
The letter indicates that Homestore has "implemented a new organization designed to place you, our customer, at the center of all we do." But so far the "new" organization appears to be almost identical to the prior organization, aside from the new former-WebMD names at the top and minus about a thousand employees whose positions were eliminated in the last six months.
"This week we will announce our Customer Advocacy Program, which will make employees throughout our company responsible for directly contacting our customers, understanding their needs and keeping the entire company focused on meeting those needs," Long?s letter continues.
The letter then notes that Homestore is "eliminating businesses that do not support our focused objective of making real estate professionals more productive and profitable." The company recently announced the sale of its eNeighborhoods business unit, which was bought back by the original owners. Which other Homestore businesses?if any?have been tagged for disposal hasn?t been announced.
Long then reiterated certain claims about Homestore?s cash position. He stated that the company expects to report positive cash flow from operations for this year and had $48 million in unrestricted cash available to fund operations as of year-end 2001.
"I am delighted that in a challenging economic climate where so many companies are having financial difficulties, we have the financial resources to meet our customer commitments and fund the growth of our business," Long wrote.
How long $48 million might last or whether Homestore might be able to raise additional capital other than through asset sales remains to be seen. The company is unprofitable, is in the midst of restating its earnings for 2000 and the first nine months of 2001 to the tune of at least $54-$95 million and faces a dozen or so shareholder lawsuits. Trading of its shares was halted on Nasdaq earlier this month in penny-stock territory. The company hasn?t announced its financial result for the fourth quarter and full year of 2001, but said the restatements will be finalized next month.
The letter to Realtors closes with a "personal" commitment from Long "to make our products and service more useful to you, to make our business practices meet your needs more effectively, and to be the reliable partner you deserve." Realtors are invited in the letter to send e-mail to Long or Ozonian.
Copyright: Inman News Service