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Move, Inc. (NASDAQ:MOVE)

Morgan Stanley Technology, Media Telecom Conference Call

February 27, 2013 7:50 pm ET

Executives

Steven H. BerkowitzChief Executive Officer

Analysts

Nishant Verma – Morgan Stanley & Co. LLC

Nishant Verma – Morgan Stanley & Co. LLC

Well, welcome, I want to introduce to you Steve Berkowitz, CEO of Move. Myself I am Nishant Verma, I cover Consumer Internet Stocks with Scott Devitt. Just before we start I wanted to read the disclosures. Please note that all important disclosures including Personal Holdings disclosures and Morgan Stanley disclosures appear on the Morgan Stanley public website at www.morganstanley.com/research disclosures or at the registration desk. And with that Steve, why don’t you start by for the benefit of those who are not familiar with the company, please start with a brief introduction of Move’s business model and your value proposition for real estate professionals and consumers.

Steven H. Berkowitz

Sure, sure, so Move, Inc. is an end-to-end solution for consumers and real estate professionals. So we happen to have the number one consumer engagement website for homes for sales, the number one moving website for people who are looking for these, the number one senior housing website, as well as we are in partners with 30 builders on a New Homes joint venture in which we are the number one leading content supplier of New Homes.

In addition to that, we have a mortgage and a pre-qualification business on the consumer side of our business. And then on the software-as-a-service side, we actually supply real estate professionals, we have both lead management software and contact management software kind of I guess thus to describe it kind of like sales force for real estate agents. And we also supply them with both websites and lead management systems. How they can qualify leads to a company called TigerLead. And lastly, we own a company called ListHub, which is the leading syndicator of real estate listings to about the top 130 real estate websites in the United States.

Nishant Verma – Morgan Stanley & Co. LLC

You mentioned a number of business lines there. Could you guys briefly explain your monetization model in terms of which businesses contribute the most to your revenue and which are the areas you see the most opportunity for growth?

Steven H. Berkowitz

Sure. There are two businesses. The consumer side of our business represents approximately 80% of our revenue, which last year was around $170 million, $165 million and $160 million. And then the B2B side of our business represents around $30 million, $35 million of our business. And on the consumer side, we monetize basically through selling leads to both real estate professionals on the selling side, on the listing side and on the buying side as well as moving leads, mortgage leads, as well as rental leads. And then on the B2B side, we safely self offer the solution on a subscription basis.

Nishant Verma – Morgan Stanley & Co. LLC

So moving to competition, I’d like to understand, who is your main competition? How does Move differentiate itself also from other online companies especially Zillow and Trulia?

Steven H. Berkowitz

Well, actually we have two types of competitors. On the consumer side, we have Zillow and Trulia who compete with us, although we are about I guess on the media side, probably a third larger than Zillow and I guess almost three times as large truly on the revenue side. In terms of engagement, we’re number one in terms of the competition, in terms of users, looking at homes for sale and page views were about 50% larger than our nearest competitor in terms of page views and in terms of visits, consumer is coming back. And then on the B2B side, our competitor happens to be a company called Market Leader, which is a company again that tells software-as-a-solution mostly to brokers. Our business model is a little bit more focused on agents.

Nishant Verma – Morgan Stanley & Co. LLC

On your most recent call, you talked about Move’s offering and how you offer sort of the content to connection to close. Could you elaborate on that value proposition that you provide?

Steven H. Berkowitz

Sure, when you think about today’s real estate market, there is, we have two types of consumers out there in the world as we look at it. There is an, what we call an unaffiliated consumer which is a consumer who is yet to choose a real estate professional. And that’s where REALTOR.com comes into play. If this idea that what the REALTOR.com’s mission is to actually say here is all the listings, we have the most accurate listings on the web and on mobile. And how do we then give the consumer, the ability to connect with an agent around the property. And that is the core, kind of the core value proposition that takes you to a connection. We do the same thing with moving where we connect you with the moving company, we did the same thing with senior housing, the world connects you an assisted living facility we’ll do the same thing with mortgage world get you to a mortgage provider.

In the case of real estate and listings, we actually take that connection through our top producer product and our Tiger Lead product and actually healthy agent to qualify that lead, and then also communicate with that lead. So, we supply them with both CRM software are really actually its web based, mobile based. And then we also help them manage that lead and see, what status is that lead, is that lead yet is it, what’s that person interested in, how do we track their searches and actually get the consumer who is now affiliated with an agent and take them all the way through to that point where they can eventually close the transaction. We don’t actually do closing transaction software, but we’ll connect them all the way through to that point.

And that’s, again, we are the only company in this space that actually literally goes from consumer to that connection and then to the close.

Nishant Verma – Morgan Stanley & Co. LLC

And you mentioned the size of your business and you have 400,000 real estate professionals in realtor.com. How should investors think about your total addressable market and how big the opportunity can be?

Steven H. Berkowitz

Sure. Well, I think there is a couple things about the industry that maybe let me kind of start and kind of focus on. When we think about the business, and we think about the addressable market, there is a couple of factors that we think about. One is the number of listings that are actually for sale. So, one of the most important drivers of the business is how many listings are there available for sale. The second driver is how many page views can we get off of those listings and ultimately figure out from that how many actual connections can we make to real estate professionals or actually assisting people doing that.

And then, the third factor is the number of agents, when you think about the addressable market. And for us, we today because of our 14-year history, we pretty much dealt with almost every agent at some point that has a listing. So, there is about 600,000 or so agents that have a listing today, but we have been able to touch at some point, most of those agents. So, when we think about the market we are thinking about, how many agents can actually have a listing that actually have a enough commissionable income that can actually drive that thing, and that’s probably somewhere around 400,000 agents or so that we think is the about the addressable size of the market. There are lot of agents who will be working with us who’ll have one listing, we don’t really consider them to be a big income generator for us. But it’s really the 80-20 rule. I would say in terms of the addressable market. There is about 2 million or so real estate professionals out there.

Nishant Verma – Morgan Stanley & Co. LLC

Okay

Steven H. Berkowitz

A million members of the NAR and about 60,000 are up listing and then 400,000 or so that we believe can be – could be addressable customers

Nishant Verma – Morgan Stanley & Co. LLC

Okay. And can you give us a few of the few performance metrics on Move that will get us sort of excited about the business or that you’re most proud of?

Steven H. Berkowitz

Sure. When we think about the business, again, I think there is couple of things. One is our page view growth, which has been pretty aggressive over the past year, probably the most important metric I tell you we are excited about is lead growth. We had a 60% lead growth in 2012. Those were actual connections from consumers directly to agents. So whether that was on a mobile device, whether that was a phone call, whether that was an e-mail with an actual connection and we grew that by 60% last year. In addition to that, I think the other metric I think that’s really critical is the fact that we updated about 90% of our listings every 15 minutes are pretty much in real time, and if you were to look at some of the surveys out there in terms of the landscape, we are by far in a way the most accurate site out there.

So the other statistic I’d say that I think there was a study done by the Wave Group. They talked about our competitors having about 30% of the listings that are either wrong, incorrect, or missing from their website. So I’d say our accuracy would be the second metric. I’m most proud of and then the third metric would be mobile, which is comScore, I guess this month, came out with, or last month, came out with actually a mobile metric for size of audience page using minutes. And then, we were number one in all three categories on the mobile front in terms of what comScore just released. And we were there in December and again in January, in terms of mobile growth. And mobile is a very important part in future in this business.

Nishant Verma – Morgan Stanley & Co. LLC

Just digging on mobile little more, I just wanted to understand like why is it very important for this category and how do you currently monetize mobile?

Steven H. Berkowitz

Well, first of all the great part about our business is our business model extends to mobile because it’s lead based. So it’s based on actually connecting consumers, so it’s not an although we do have some media revenue, traditional brand advertising on the website our mobile applications naturally extend to the web because what they do is they increase the connections that we can have between real estate professionals and consumers. I think mobile also is just a natural evolution because a consumer can now sit in front of the house and literally connect with an agent, that’s why today accuracy is that much more critical because there is nothing worsen looking at a listing on a mobile app and driving up to the house and finding it’s not there or finding that the price is wrong or finding that it’s no longer on the market, I mean there is lots of different reasons why you do it and with the market heating up now that’s even becoming more of an important factor.

And then mobile actually can help over time make the leads a lot smarter which means that if I’m sitting in front of the house and I send an email or make a phone call to an agent, the agent is going to need to respond in a lot faster timeframe than they have in the past and that’s why our B2B business is so important as we start to develop tools to help the agents respond in real time to some of these things because demand now is in a sense outstripping supply in a lot of markets which means that consumer are more intend on getting that instantaneous response than they have ever been and agents are finding or looking for tools and we could actually supply those tools both on mobile on mobile also.

Nishant Verma – Morgan Stanley & Co. LLC

You mentioned one of the advantages was sort of the information advantage in all the listings being up to date, my understanding was most of it’s drawn from central data base how I guess how is Move’s listings more up to date or so then sort of other competitors?

Steven H. Berkowitz

Sure. Well today to get the listing is about 850 plus MLS is out there that MLS is a Multiple Listing Service in which the agents enter in the information about a listing. And the reason multiple listing services exists, one of the main reasons as what they call cooperation between two agents, buyers agent and the sellers agent may govern the rules of that engagement. But we get direct feeds from all 850 of these plus and MLSs, and we get them for 90% of the listings, pretty much as I said earlier in real time.

And that’s relationship that’s taken 14 years, and millions and millions of dollars of investment to build. Our competitors have not invested in that. In addition to that, they also get about 50% of their listings through our subsidiary list hub in which we actually manage, give the brokers the opportunity to manage their listings. But our competitive advantage is that something that’s been built up over years and a ton of investments.

And then the last piece I talk about is, you actually in this industry, the interesting part about our industry is that our customers or our content suppliers, which makes that relationship a little bit more, a little very different than any other business that I’ve been in. So, you have to manage that relationship in a way that is of equal size and we’ve done a tremendous job invested quite a bit of money in building relationships with the MLSs.

We also give them free software to help them manage their memberships and help their members search for information. We give them a free search appliance, there is a lot of things that we do that works with the industry that nobody else in the industry spends the time or the money doing. And that I think gives us that huge, what we think is a competitive advantage that actually we believe is now increasing over time as the mobile market place starts continues to grow.

Nishant Verma – Morgan Stanley & Co. LLC

You mentioned these syndicate listings, competitors, I guess why do you do that and how big you think that would get?

Steven H. Berkowitz

Well, a big portion of our, well first of all we do it, because the industry is, if it asked us to do it, right. They have asked us to help them create the tools to manage their listings syndication.

So couple of years ago, we acquired a company called ListHub, which is in the business of syndicating listings and what and the whole purpose of that is to allow the publisher i.e. I mean allow the content owner, i.e. the broker, to manage where their listings are going. So we’ve given them a free dashboard that allows them to say, if they follow this set of rules, and they don’t re-syndicate data or they don’t put multiple agents on a listings or they don’t know whatever the rules they know we have different set of rules. And they can manage, so they can manage their content about 50% of the listings or about 430 MLSs and about 80% of the listings are in the ListHub database. So we are able to manage that.

What we get from that is we get back all of the clickthrough data and all of the analytics that go along with the activity on those listings on a 130 publishers including our competitor’s site. So we are actually able to give the agents and brokers back some very important data about how they are managing their marketing dollars, and how their performance of their listings doing across the full gamut of sites across the Internet from Realtor.com to Zillow to Trulia to FrontDoor, Yahoo to MSN to Aol and it go down the list. And it allows them the ability to see the performance of that and that allows us also to understand the performance of listings, which allows us I think to create better products on the B2B side.

Nishant Verma - Morgan Stanley & Co. LLC

Okay, just shifting gears a bit, I’d love to get your view on the real estate market right now in terms of where you think we are, and where you think it would be a further recovery and just your general outlook?

Steven H. Berkowitz

I think there is a couple of things, I think it’s kind of actually pretty amazing, how quickly the marketplace has gone from a buyers market to a sellers market and a lot of places in the country. And that’s driven specifically actually by three reasons. I think the first is most important is supply. Supply is at a record low, if you saw the pending home sales that came out for January, they were up 4.5% year-over-year but supply is down about 17% year-over-year, but what you’re seeing is very tight inventory in lots of local markets. So that’s one side, I think you’re seeing. So I think you’re going to see a continued recovery, our stabilization both on the price side maybe some growth in price and average price, but it will be more significant on a market-by-market basis. If you continue to see tight inventory, I think you’re going to see a shift to a sellers market, which in turn I think will allow prices maybe to move more aggressively forward.

Second thing, I’d say is that what’s interesting also is what’s happening on the new home side of the industry today. I think what you’re seeing is, there is a couple of constraints on the new home builders that are starting to come into the system, one is land, right. For the last five years, they have stopped accruing land. So what you’re starting to see on the new home side is then actually building on their inventory at land. So you’re starting to see some strains on the new housing side, on the new home side of the business. You’re also seeing timber prices go up, the cost of construction going up, you’re starting to see just the cost of building a home, going up labor shortages, transportation charges. So it’s interesting that that new housing market is strong. But I think there is going to be, it’s not going to equal out at the supply side that really is what we see. And so hopefully as prices rise, we’ll start to see more people put their homes on the market, which I think will be the big constraint to this 2013 year, in terms of number of transactions.

Nishant Verma – Morgan Stanley & Co. LLC

And how depend is your, I guess, your business on the underlying real estate market, I mean would you have to wait for recovery for the business in flat? Or could you see signs of…

Steven H. Berkowitz

Well I think our business is inflected already…

Nishant Verma – Morgan Stanley & Co. LLC

Okay.

Steven H. Berkowitz

I think what you’re seeing is, and it’s happening even without kind of the big push from the economic perspective I think what you’re seeing as a business. We’ve rode both the sellers market. We rode the housing boom. We’ve written the housing bus then now we’re back into a, but we hopefully is a more equilibrium market and hopefully even a rising market. And what you’re seeing is this year we’re projecting growth of around 12% kind of the midpoint of our guidance. We’re projecting profits to go from about 13.5% on an EBITDA basis to around 15% on an EBITDA basis. So, you’re seeing us starting to see our business actually going to double-digit growth, which for us is a really important step in terms of delivering that considering we actually are the number one company in revenue and the number one in profit in the industry.

Nishant Verma – Morgan Stanley & Co. LLC

Okay, and just wanted to understand also your sort of Traffic acquisition strategy in sense that how reliant are you on search engine traffic and then how do you spend your marketing dollars?

Steven H. Berkowitz

Sure, well, first of all we don’t spend a lot on marketing in this business, although hopefully this year we’ll start to spend more, I think you’re going to see some very exciting things from us, partly because we have a real positive story to tell or really exciting story to tell, because actually the currency of our content actually now more than ever is important.

So, 95% or so of our traffic comes from either SEO or direct URL traffic, so we don’t really have very high traffic acquisition costs on the REALTOR.com side of our business. Some of our rental businesses and moving businesses are a little bit more on the arbitrage side, so you’ll see us do more traffic acquisition costs on those businesses, but on the core Realtor.com business, 95% of it’s organic.

Nishant Verma – Morgan Stanley & Co. LLC

Okay, about 95%. And then one of them, I mean you obviously have a lot of partnerships with the NAR and then some others, can we talk about, I guess could you just elaborate on your current partnerships and then, how they’re performing and what areas you maybe further looking to expand into?

Steven H. Berkowitz

Sure. Well, first of all we’re the official site of the National Association of Realtors, which we have been for 14 years and actually has been a very strong partnership and actually I think continues to give us kind of a helpful presence in the overall real estate industry which itself is a it’s got a very strong association. So, that partnership is going well and continues to move and we’ve made lots of adjustments in that partnership over the last two to three years, which have allowed us to engage in things that, in the past, we weren’t allowed to do under the agreement, but now we’re pretty much free to kind of be very aggressive. In terms of some of the other key partnerships, we are very strong partnership with MLSs and we spend a tremendous amount of time and energy helping the MLSs in lots of different ways, from, as I said earlier, from supplying them with software, a product we call FIND, which allows them to allow their members to search and get great information, because our search engine is dramatically better than anyone in MLS have. So that which also gives us access to more of their data including their soul data, their pending data, and other extended licenses around the use of photos and other things.

And then lastly, I’d say, our relationship with our customers, the brokers is also a partnership. And so you are seeing us in a lot of ways now to help extend the product and services that we do at the broker and agent level, then one product that we do today, which is a great example of our partnership, is our product which we call Collaborative Search, which is a mobile application that once the consumer has become affiliated with an agent, we allow the agent to customize our downloaded app. They are mobile app, so they can have a one-to-one dialogue with the buyers’ agent and allows them to brand the app with their logo, with their face and have a one-to-one relationship with the buyers.

So we did lots of things to partner with our customers, partner with our content providers and partner with the industry.

Nishant Verma – Morgan Stanley & Co. LLC

And so just more recent this consumer marketing that you…

Steven H. Berkowitz

Yeah. I mean, I think which you are going to start to see us do, one of the things we did in the second half of last year, is hired an entire we expanded our marketing team fairly dramatically. We hired a Head of Marketing. We’ve always very successful in marketing to the trade. We’ve done a really good job of marketing to brokers, MLSs, and people in the industry. We haven’t really, because of our traffic being 95% organic, we have not spend a lot of time or as much time as we should of actually marketing to consumers and what you’re going to see us do in the coming months and in 2013 is actually focus on how do we get the message about what we deliver to the consumer, the value proposition into the hands of the consumers and that’s going to happen a lot through online, that’s going to happen through a lot of it through on investment in PR, so we’ve hired a new Head of PR, we’ve hired a new Head of Brand Marketing, we’ve hired a new Head of Marketing, we’ve hired a new Head of SEO and Affiliate Marketing. So we’ve really expanded out our focus on internally on the people side because we believe a lot of it will come from the quality of the products we deliver.

Nishant Verma – Morgan Stanley & Co. LLC

Okay, I also want to leave some time for questions if anyone has any questions or I will continue. Okay, we’re going to continue and then I can come back later. Also I want to get more you sort of long-term strategy and how you see the role the real estate agent and the market in general in sort of 5 to 10 years.

Steven H. Berkowitz

Well, what’s interesting is that we believe that the real estate agent is an important part of the transaction. We believe that they serve a very interesting part of the value chain. And if there was anything was ever going to happen to potentially change that you think it would have changed over the last five years when the market moved from a sellers market to a buyers market in a sense that you would think the role of the real estate agent would have changed, but it actually has evolved and we see it continuing to evolve.

The role of the agent is no longer the curator of content, the way it has been in the past of the protector of content or the gatekeeper to content that was in the past. I think the Internet has changed that, I think mobile has changed that and I think what you are seeing is the agents actually doing what our real good local business stand up, which is actually continue to become the local expert, continue to add a tremendous amount of value to a transaction that is pretty complex at the end of the day and actually in a lot of ways life changing. I mean, we did a survey in 2007 and about what consumers thought of the real estate transaction, and at that point they were afraid of it, they were kind of, they were not sure exactly what to do, we did a survey in last quarter and what we found is consumers are dramatically more confident about the transaction themselves.

But one of the interesting findings was although they wanted to get in contact with an agent later in the cycle, we found out that they actually wanted an agent in the transaction because they wanted somebody to help them negotiate, somebody to help them make that decision, somebody to help them get over the finish line, actually somebody to help them when they move into the neighborhood, if they are on the buy side or if they are selling on the sell side to help them get the house ready for sale.

So the actual role of the agent has evolved and I think it will continue to evolve which may mean at some point you have less agents in the future, but I think you will, as the 80/20 rule goes, but I think, I think you will see their role continuing to evolve as more of a local partner on the home ownership transaction side. Because I think consumers continue to want to have that level of expertise given the size and scale up, this is probably the single biggest transaction, they are going to make other than probably getting married.

Nishant Verma – Morgan Stanley & Co. LLC

Yeah, sure go ahead.

Unidentified Analyst

[Question Inaudible]

Steven H. Berkowitz

Sure, right. Yeah I think what you know we have a specific kind of business practice and which we don’t allow agents to market their brands on other agents listings, right. So, if you look at out site which you’ll see on an individual listing detail page, you’ll either see the listing agent and the listing broker as the marketer on the page, but you’ll see a lead form that allows you to go to an agent, but that agent will be contacting you through e-mail, because again we find it confusing from a consumer perspective to say, is this the agent, the listing agent, but wait a minute, how can the listing agent would be call a banker, but the agent I’m sending it to be a RE/Max agent.

So, when you get an e-mail from us saying that you are going to be contacted by a local real estate professional when it’s not the listing agent we’ll tell you it’s the buyers agent and we’ll tell you their background, so in the e-mail itself. So, there is just a different practice that goes on in the industry and that’s one of the big kind of bones of contention in this industry which is who and how do you manage the lead off of the listing given the fact that the person who knows the most about the listing is the listing agent.

So, as we look at it, we look at it and find two different ways to do that we want to make sure that the buyers agent is well informed and at the same time we also want to let the consumer know who they are contacting. So, it’s, yes, to answer your question in short-term, yes, it does create confusion in the industry and it actually has there are lot of brokers who, and agents who get, pretty upset with the fact that, I spend all this money, it’s like C 21 on marketing my brand and there is a RE/Max there next to my listing it’s, because the brokers are really trying to establish their brand also. And so, we believe that because we can co-exist with them, we actually look at being very, we call industry friendly about how we manage that.

Nishant Verma – Morgan Stanley & Co. LLC

Any other questions? Okay, I have one or two more, I just want to understand the offline to online dynamic, I mean it affects a lot of company that we cover, I mean it’s a strong secular shift for them, I think in this category offline is still the predominant spend and I just wanted to get your long-term view on, is that a strong tailwind, and do you see, when do you see more of the dollars moving online in terms of advertising?

Steven H. Berkowitz

Well, I think, you went through five years of what was the worse economic downturn. So, what you really saw was, you did see some shift, quite a bit of shift to online, but you also saw a big decrease in spend, right. Agents at the end of the day are local businessmen and they live pretty much hand to mouth in a lot of ways.

So, I think what you’re going to see and they’re still very wedded to the traditional forms of advertising. Again, the average age of a REALTOR is 50 some odd years old. So, I think what you’re going to see is, you actually are going to see a continued shift to online. I think you’re probably going to see a continued decrease in the macro amount of spend. So, let’s say today the marketplace is about $50 billion of commissions that exist today. That’s probably somewhere between $5 billion and $7 billion of marketing spend, if you assume they spend somewhere between 10% and 15% of the gross commissions on marketing. And today between the top three websites, actually the top seven websites, because we include, or six websites include, MSN, AOL and Yahoo!, which are either redistribute and sell for AOL and MSN and then also sells for Yahoo!.

So, the top six, six of the top websites account for maybe $300 million and $400 million of spend out of $5 billion. So there is a lot of opportunity for dollars to move in and the ROI on an email, on a web lead is just dramatically better than any other form of advertising. So, I think you’ll see, you’ll continue to see that shift I think that will benefit the industry.

But I think the other thing the industry has to do is invest in the tools to help the agent manage that lead and that’s an area that I think that’s going to be critical. It’s an area that we sell out, because ultimately at the end of the day the agent only has so much time to manage their business, so we have to make those leads smarter, and I think that’s what’s going to help shift that online to offline dollars, I mean from offline to online.

Nishant Verma – Morgan Stanley & Co. LLC

Okay. And then just longer-term, I guess what are one or two areas you think Move can do a bit better and then and sort of maybe the competition is doing or innovating them on that front?

Steven H. Berkowitz

Well, I would say that that I think there are things that we have been out innovated in the past. I think today we’re actually leading the industry as I said earlier, things like collaborative search. And I think what you will us do is actually expand our content base to be more competitive. I think that’s an area that we’ve been done as well, and it’s probably what we called the off market properties.

And I think you’ll some exciting stuff from us this year, and how we think about offline properties and neighborhood and information around the neighborhood. So I think there is some very exciting things on the consumer side that you will see us do. And then on the B2B side, I think we’re actually think are actually leading the industry with some other things we’ve done with our top producer product on mobile. And I think some of the things that where you’re going to see come from us both on the TigerLead and ListHub side well I think help to drive some of the innovation in the industry.

So I should think we’re, at this point, extremely well positioned on the consumer side, and I think we’re extremely well positioned on the B2B side or the software-as-a-service side to actually I think connect those two where nobody else can’t. So I think that’s going to be a big area of innovation for the industry, which is going to be the lead management piece and I think we’re pretty well positioned to do that.

Nishant Verma – Morgan Stanley & Co. LLC

I guess there is time for maybe one more questions. Anyone has any from the audience. Oh, there.

Question-and-Answer Session

Unidentified Analyst

(Inaudible) and the business itself. It appears that you have more of that, okay, then your competition. So, (Inaudible) I would anticipate knowing the way that basically real estate industry is very proprietary in way you think. My listing is my listing that you could actually gain market shares back from them at some point. It seems to me there little bit of ahead of themselves. They are like an empty Craigslist (inaudible) potentially important. And also they post tremendous amounts of local information relative to tax credit metrics, most of which I think [is about] 35% in accurate.

Steven H. Berkowitz

Yeah, I mean actually yeah.

Unidentified Analyst

And a lot of tendency to think that we will move away from them back to you, which would make your business more, at this point, more interesting as an investment.

Steven H. Berkowitz

Well, I think at this point, again, I always feel that we are we’ve done a lot to position this company for the turnaround, right, for the marketplace. I mean we made it through what was, as I said, was the five most difficult years in the housing business for anybody who has been involved in housing area or the economic challenges we have had in last five to six years.

And I think as a company, we are now coming out of that in a position that I actually believe our relationships with the industry are going to be a huge benefit to us. Because as the market moves from a buyers’ marketplace, to a sellers’ marketplace, or even to more of an equilibrium, I think the relationship that needs to happen between us as a provider of consumers to the real estate professional, becomes on a more equal footing, which I think is to our advantage, because we have always been very strong with our relationships with the industry.

So, I actually believe that it’s actually a competitive it’s actually become more of a competitive advantage that has been in the past. So, yeah, I think we are in a I feel like we are in a very, very good position to execute around the needs of the marketplace. And I think our relationships are going to benefit us now more than that. I can’t speak to the valuation differences. That’s actually your guys, fairly work. But I can tell you that when you look at our business, we feel that we’ve got better margins than our competition when you equalize for the EBITDA differences in which Zillow capitalizes their website development, which is probably 5 or 6 points of EBITDA margin that we don’t have. We’re growing at double digits. They’re growing up a smaller base. We’re growing in total dollars of pretty significant number next year. And I think the relationships we have with the industry are going to go a long way to hopefully giving us more of a competitive advantage as we go into 2013, 2014, 2015.

Nishant Verma – Morgan Stanley & Co. LLC

All right, thanks. I think we’re out of time. So…

Steven H. Berkowitz

Great, thank you.

Nishant Verma – Morgan Stanley & Co. LLC

Thanks a lot for your time.

Steven H. Berkowitz

Thank you.

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