Activerain.com and HouseValues.com- The Ultimate Irony

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Activerain.com received a capital infusion to the tune of $2.75 million from Housevalues.com. It was announced on Inman News, posted here, on BHB, and explained on Activerain.

Housevalues has suffered an erosion of market value since its post-IPO “pop” in early 2005. It added 50% from its IPO price and held steady through out 2005. As the real estate market declined, so did the value of Housevalues.com; it’s stock price plummeted below $10, in May, 2006 and has steadily declined to its current sub $3/share.

While many members of Activerain.com are showing a stiff upper lip, they are exhibiting cautious optimism. Most REALTORs have had less than stellar results with the Housevalues.com advertising/lead generation platform and are wary of the portal’s high-pressured telemarketing operation.

What does Housevalues.com get for its $3 million? Activerain.com has 66,000 members, probably 10-15% of them active. While the press release from Jon Washburn states that the member’s content is not released to Housvalues.com, one would think that the investor has a first right of purchase for the remaining stock. If the rumor of the equity ownership is correct (35%), Housevalues could purchase the Company for about $9-10 million, members’ information and all.

What Move.com said was worth $33 million, Housevalues.com is buying at a substantial discount. Activerain has a “great franchise”, just like Countrywide does. What Bank of America saw in Countrywide, House Values sees in Active Rain.

I just think the irony of the lead generation company paying for leads is worthy of a chuckle. Hat tip to Jon and Matt for making the sharks pay for the meal.

Our story so far: Trying to keep up with developments in the ActiveRain saga? These are all the BloodhoundBlog posts to date:

More to howl about...

18 Comments

Jay Thompson says:

“Housevalues could purchase the Company for about $9-10 million, members’ information and all.”

I don’t think HV has 9 – 10M. Of course, I was surprised they had 2.75M lying about. They’ve got to be bleeding red ink.

If anyone at HV is reading this, give me a call. I’ll sell you some leads… 🙂

January 21, 2008 — 9:57 pm
Joe Hayden says:

Hi Brian…

Your comments about Housevalues being able to purchase all of the user content makes me want to go delete my blog posts at Activerain and just go…

What are your thoughts on the matter?

January 22, 2008 — 3:39 am
Greg Cremia says:

Anybody who didn’t see this coming had their eyes shut. Not necessarily HV but something similar. I backed out of AR last summer. I don’t like putting so many eggs in some one else’s basket.

I then realized I can have my own blog with just as much juice as AR. I predict a lot of people will end up getting hurt.

January 22, 2008 — 5:40 am
Arlington Virginia Condos — Jay says:

That’s classic–HV buying leads. I was somewhat of an early bird with HV w/ an exclusive territory and then JustListed as well. Later canceled both services but held on to their excellent follow up system of Market Leader–love it’s customizable drip campaigns and templates.

The best thing I got from HV was access to a forum of other tech oriented realtors–at least we were headed in that direction and learning as we went along. Some great ideas by some members such as Hartanov motivated me to step out with technology….

They blew it by focusing on growth and not improving their users’ experience. Still with their weekly phone meetings with productive members their attempts were quite admirable overall so I couldn’t complain. Part of my evolution….

January 22, 2008 — 5:43 am
Brian Brady says:

“I don’t think HV has 9 – 10M. Of course, I was surprised they had 2.75M lying about. They’ve got to be bleeding red ink.”

It looks like they have about $65-70MM in cash or cash equivalents. The stock is trading below stated cash value (cash stated as of 9-30-2008).

HV could be an interesting company to watch. They’re diversifying their core business from leads to a suite of tools for the real estate agent through acquisitions and strategic investments. If Activerain can sell blog platforms and increase its advertising revenues, HV will buy the rest of the Company.

January 22, 2008 — 7:37 am
Jim Gatos says:

This is why I host my own blog, my own website.. That way, no one “owns” me…

Jim

January 22, 2008 — 8:08 am
Brian Brady says:

“Your comments about Housevalues being able to purchase all of the user content makes me want to go delete my blog posts at Activerain and just go…”

All they’ll do is telemarket you, Joe. I wouldn’t worry about it.

“That way, no one “owns” me…”

Jim, this is a serious question. Doesn’t WordPress “own” you now? I never understood that.

January 22, 2008 — 8:14 am
Bob in San Diego says:

Your comments about Housevalues being able to purchase all of the user content makes me want to go delete my blog posts at Activerain and just go…

Don’t delete your posts, truncate what is on AR. Leave a paragraph on AR and link to the rest of the post on your own blog, unless the post isn’t appropriate for your own blog.

January 22, 2008 — 8:27 am
Missy Caulk says:

I think you said it right, Bryan, cautiously optimistic. Since I used HV many, many years ago,( before I got smart and stopped paying for leads) and did a multitude of CMA’s and got one listing and spent thousands of dollars, I am NOT jumping up and down. But, the hand writing was on the wall for AR,after the MOVE fiasco.

I wish nothing but the best for Jon and Matt, at least they will have breathing room and we’ll all just have to wait and see where it takes us.

And all I can say when I get HV’s tele-marketing call is, “Been there, done that”, good-bye and have a nice day.” Maybe they will read this and not call. LOL

January 22, 2008 — 8:37 am
Doug Quance says:

I sensed something like this was going to happen a long time ago… and I deleted my posts back then.

I saw it as a bunch of free content that would be sold to the highest bidder.

No thanks.

January 22, 2008 — 8:37 am
Doug Quance says:

Oh, and I don’t have any problem with Jon or Matt (in fact, I use Matt’s servers for my websites)… but HV on the other hand – that’s another story. My story is like Missy’s story. Thousands of dollars wasted.

January 22, 2008 — 8:40 am
Brian Brady says:

“Oh, and I don’t have any problem with Jon or Matt”

Hell, no! They’re great guys. I’m happy they got some scratch for the work they’ve done. They claim it’s all going to R&D so I hope they make millions from an eventual sale. If HV buys it for $9MM, the boys will get JUST enough to take a vacation and seed their next venture.

Remember, these guys are young. As much as we complain about how they don’t understand the industry, they are MILES ahead of most tech providers.

January 22, 2008 — 8:59 am
Jim Duncan says:

I’ll echo Jim Gatos – this is why I host my own blog, and the ownership of the content is clear – it’s mine.

Would AR allow their users to download all of their content and move it to another service? Is there a conversion utility? While WordPress is great right now (and hopefully will continue to be) I can always download everything and move over to something else – Typepad, Drupal, etc.

If I were an AR user, it would frighten me that I could possibly never get all of my content onto my own computer or server.

In this world, content is king, as is ownership of said content.

January 22, 2008 — 10:03 am
monika says:

I’ve been doing what Bob suggested for awhile now…truncated a lot of my older posts. Like most of us I saw something coming and planned for it.

January 22, 2008 — 12:04 pm
Carole Cohen says:

‘making the sharks pay for the meal’ – leave it to you Brian, to come up with a memorable quote!

I decided after the Move debacle I wasn’t going to be about any of the choices so I’m not too bent out of shape. Besides we have outside blogs. Also, I still think it was always someone else’s playground so I never really assumed things would stay the same.

Thanks for the best post on this issue 🙂

January 22, 2008 — 9:48 pm
Eloise Gift says:

Irony indeed! I hope HouseValues is paying dearly for any leads or presence they have on ActiveRain. They owe a lot of people – including several on ActiveRain. They had a creative idea that was flawed and used it to fleece people who wanted to be their partners, thousands of dollars. I am wary of any association with HV. I cannot help but wonder what scheme they will come up with to pull money from my pocket to theirs.

March 19, 2008 — 10:17 am
Eric in Bellingham says:

I hope that they keep the website the same and not change anything around. People like active rain because of the way it is.

April 5, 2008 — 7:36 pm
Emmett Smith says:

I’d like to hear from some one who has something good to say about HV. I used HV for a year, paid for 3 zip codes and ended up with 1 listing and 1 sale. Most of the leads wanted to know why I was calling, all they wanted to know what their house was worth. They couldn’t understand why I needed to see the inside of there house. Not a good investment! If HV buys AR all of us need to run. HV will not be a free site.

April 8, 2008 — 9:31 pm