The Ten: How Andy Florance took on the portal giants
The CoStar CEO, who has openly criticized his competitors, set an ambitious goal for the company’s Homes.com search portal in 2023 — and beat it.
Editor's Note: In a historic year shaped by trials — of all kinds — a handful of people and themes have emerged as defining forces. Real Estate News has selected the top newsmakers of 2023 who have left a mark on the industry or shown perseverance in the face of epic challenges and opportunities. They are The Ten.
Whether viewed as a friend or foe, CoStar — led by Founder and CEO Andy Florance — has been laser-focused on bolstering its Homes.com search portal this year. And that means leaning in hard on the competition while making an ambitious appeal to agents.
Florance has been bold — and at times, brash — in 2023, never hesitating to lob a criticism at competitors Zillow, Redfin, and Realtor.com, but also speaking plainly about his company's goals and what he hopes to achieve: the number one spot among home search portals.
While there were whispers about a possible CoStar takeover of Realtor.com earlier in the year, Florance ended up pivoting to a strategy that focused on bulking up Homes.com's staff and resources in an effort to win the most consumer traffic and agent adoption.
CoStar's pitch: Your listing, your lead
Early in the year, Florance became increasingly vocal about his commitment to growing Homes.com and overtaking his rivals in the portal space. He pointed to his experience building up rental and commercial real estate search sites, which have helped CoStar become a goliath with a market capitalization of nearly $36 billion.
But Florance also promoted a different philosophy: Your listing, your lead.
"We think we can create a lot of value, and we think we can do it harmoniously with the industry as opposed to in competition with the industry," he said at the T3 Leadership Summit in May. "Everything we've done before — LoopNet, BureauxLocaux, Realla, BizBuySell, CoStar, Apartments.com, Land.com — they're all 'your listing, your lead,' and have been 'your listing, your lead' for 40 years."
This is in contrast, said Florance, to the business models of Zillow, Redfin and Realtor.com, which he described as "your listing, our lead." Only "a teeny percentage — like low single digits — of agents benefit from that platform," Florance told Real Estate News in May, referring to the leading search portals.
Florance has also been very critical about Zillow and Realtor.com's consumer experience, often lambasting the "Contact agent" button and running a Homes.com ad campaign that promises consumers "no fake agents."
Claiming the number two spot
Florance said in May that Homes.com could become the second most visited home search site within a year — but just four months later, CoStar proudly declared in September that Homes.com had achieved that goal by hitting 100 million unique visitors in one month.
While some questioned the company's numbers, there was no doubt that Homes.com was the fastest-growing residential real estate portal in the business. "I think what it means is that the playbook for growth is working," Dave Mele, president of Homes.com, told Real Estate News at the time.
But it was all a part of Florance's plan.
"I believe we have a lot of runway ahead as we continue to implement our content, product and marketing plans," Florance told investors during the second quarter earnings call in July. "We're clear that we have more and bigger traffic levers to pull to grow traffic over the quarters to come."
And there's still more to come.
Florance hinted at bringing on a celebrity spokesperson for Homes.com earlier in the year — and no, it won't be Jeff Goldblum, CoStar's spokesperson for Apartments.com, Mele confirmed in November.
And then by the end of the first quarter of 2024, Homes.com will roll out a paid membership package, which "could be under $300 for agents," Mele said, giving agents more exposure through boosting their listings and their agent profile on the site.
And at a fundamental level, Florance says Homes.com aims to be friendlier to agents.
"This is a super simple business concept. You want to support your customers — you do not want to think you're smarter than your customers," he said in May. "We can be much more successful by resonating with our clients and looking at who the agents are than by trying to be trickier than them."