CoStar announced late last week that its database is now fully integrated with LoopNet. My initial reaction was, “What took so long?” and I wondered why they were making such a big deal about something that seemed so obvious.
LoopNet was purchased by CoStar in 2012 and has remained mostly separate from the parent regarding the data on each platform. LoopNet is public facing while CoStar is the subscription based service that most of the corporate real estate industry uses to track properties around the country. Updates were made to properties separately, which wasn’t ideal, and the accuracy of the data on LoopNet was questionable. On top of the that, the leads generated for brokers and owners from LoopNet weren’t particularly strong.
CoStar is taking steps to change that.
Now that the information in LoopNet and CoStar will match, users looking for space will be able to access more accurate data. Again, you think it’s an obvious improvement. It is.
It’s also a step towards connecting landlords and tenants directly.
In many cases, small users are underserved. Experienced brokers choose not to work on small deals because the time spent is typically longer than larger deals, and the return on their time isn’t as profitable. Therefore, smaller deals are left to inexperienced brokers who may or may not provide a high level of service.
For these users, technology may be the answer. But we aren’t there yet.
eBay created a model where sellers and buyers could connect directly. StubHub followed with a platform that uses technology to do the same and was eventually purchased by eBay. AirBNB created a similar platform to connect people for hospitality. Uber and Lfyt similarly for transportation. While WeWork and other co-working facilities cater to the smaller user, there are still many that prefer to have their own space for a variety of reasons.
I could be way off. CoStar may just think of this as a natural evolution and a way to provide better service to their customers. I have been using CoStar since 1998 when it was a dial-up and download service (those under-30 can call me and I will explain what dial-up means). They have come a long way since then, and they are now a $9b publicly traded company. Increasing their advertising revenue is very important.
Someone will eventually change the way the game is played.
Is this CoStar’s step towards doing so? Only time will tell. In the meantime, they are giving their subscribers and users a better product on both CoStar and LoopNet. That alone is newsworthy.