Online commercial real estate marketplace LoopNet last week announced its acquisition of Cityfeet.com, an online distribution network for commercial property listings that has more than 100,000 active listings. Cityfeet.com's network distributes its listings to more than 100 partners, such as the web sites of The New York Times, Boston Globe, Los Angeles Times, Chicago Tribune, Dallas Morning News and Atlanta Journal-Constitution.
LoopNet paid $15 million for Cityfeet.com and will spend another $3 million if performance goals are met. In a company statement announcing the deal, LoopNet said it expects at Cityfeet.com will add about $1 million in revenues for LoopNet for 2007.
LoopNet also expects the deal, which combines LoopNet's marketplace with Cityfeet.com's distribution network, to increase exposure for both companies’ listings. If it works, both LoopNet and Cityfeet.com will accomplish their goals of being leaders in their segments.
Customers of both companies are certainly positioned to benefit. LoopNet's customer base, which consists of commercial real estate agents, brokers, buyers and tenants, are seeking the largest possible audience to see listings or find appropriate properties and LoopNet and Cityfeet.com are doing that through this deal--something they couldn't achieve on their own. Chances of satisfying customers within the real estate sector should only increase as the LoopNet/Cityfeet.com listings become more prominent in the online space; something online customers expect these days. The acquisition should prove to be a smart move by both companies. It won't be surprising if LoopNet contemplates future deals to expand its marketplace even further.