Recently seen online: “CoStar to Buy LoopNet in $860M Deal. Wow. Headlines Used to Only Be About Both Companies Suing One Another…Hello @Google. Are you building a competing #CRE listing solution?”

JC Goldenstein CREOpoint Founder and CEO

As expected after a recession, the big continue to get bigger. Further to recent deals involving ARGUS Software, DTZ, Newmark and ProLogis, CoStar announced on April 27th an agreement to acquire LoopNet for $860m.

Having recently founded a company in the online space, I followed with interest this exit by LoopNet founders. So  first, congratulations to the founders of CoStar and LoopNet who took great personal risks and changed how our  industry does business.

As the acquisition news broke, I did not even have time to think about how organizations like NAR, Bloomberg,  Moody’s, DMGI and the CBREs of this world would react. The phone began to ring. Many brokerage firms  who buy our trusted insights were eager to learn what was being said online, and asked us what the CREObuzz ™ was.

From the instantaneous reaction of blogs and forums to traditional news sources, we instantly know what is being said across the 10,000 CRE-relevant sources CREOpoint monitors. We uniquely filtered through the numerous broker’s listings as well as the numerous references currently in the press from the Cannes Film Festival, where stars, costars and fans created so much irrelevant online noise.

As we narrowed about one million articles a month down, we found 1,085 relevant online conversations in 485 sources during the period April 27-May 10, including many from members of the CREOpoint community. For example we found insightful comments from brokers, lawyers, IT and publishing professionals like Bo Barron, Chris Clark, Coy Davidson, Dave Lewand, David Bodamer, David Stejkowski, David Niles, Duke Long, John Reeder, Joe Stampone, Paul Brokmeyer, Richard Harris and Robert Pliska among others.

Commercial Property Executive asked CREOpoint to share some of theCREObuzz ™ highlights regarding the industry’s reaction to the acquisition. People agreed that there was a clear fit between Research and Marketing, and between CoStar physical presence and LoopNet e-commerce site. John Reeder from Sperry Van Ness thought that LoopNet’s less people-intensive business model was more scalable and profitable. Since CoStar was trading at 90X earnings they may have decided to pull the trigger before being overtaken by LoopNet.  Was this a case of buy or be bought? The big questions now are how will the industry react, and will the real estate industry ultimately accept it?

The sentiment was mixed. There was agreement that the combined company would be a “strong” (569 online mentions) “giant” “winner”. Both CEOs Andrew Florance and Richard Doyle had pushed upbeat messages about innovation, cost reduction and cross selling. However after the initial positive reactions and despite CoStar waving not raising their prices the last couple years, most of the buzz ended up being about the “I own the market” culture of CoStar and likely price increases:

• “LoopNet suddenly just got significantly more expensive, as LoopNet served as the only real competition to CoStar.”
• “Get the checkbook ready! Can it be blocked?”
• “All brokers are going to give away their data for free to one company who will sell it back to us at what price?”
• “It makes us think twice about sharing comps going forward.”
• “Not good news, CoStar is not as user friendly”
• “Right now the listing systems are run like a swap meet.”

Of course@CoStarSucks on Twitter also weighed in:

What's being said online about your brand?

Net-net, our industry is subject to the same economic forces besieging all the others; it just has taken longer for consolidation to occur on a broad scale.  We see the CoStar-LoopNet transaction as a harbinger for many more mergers in the technology, finance, brokerage and service sectors of commercial real estate.  And yes, expect to pay more for the services provided by the new CoStar. They will be cross selling and bundling PPR, CoStar and Loopnet services. Ultimately that might provide savings just like when we buy CableTV, internet, and phone services together.

Also expect CoStar to address the above publicly once the deal closes… If you’d like to know more about the power of online media to influence perceptions about your business reputation, visit CREObuzz.com. Find out how your business compares with your peers. In the meantime, to keep current on the buzz about CoStar, simply follow our blog here and CREOpoint.comfor updates. The integration phase, marketing later this year and corresponding competitive responses are likely to prove very interesting…