Northstar Travel Media Apparently for Sale

According to media reports, Northstar Travel Media is for sale. Boston Ventures, a private equity fund, acquired the travel information company from Reed Elsevier in 2001.

Among the company's offerings are directory/database products, including hotelandtravelindex.com (which provides hotel information to a customer base of travel agents and corporate travel planners) and omfg.com (Official Meeting Facilities Guide). OMFG, which provides property information for meeting planners, contains information on more than 42,000 facilities and 12,000 cities across the globe. Northstar also owns Star Service Online, which offers information and commentary on about 9,000 hotels worldwide.

Northstar's properties are certainly valuable to their customers. But the question is how valuable they are to prospective buyers. In such uncertain economic times, companies who may typically have been interested in making acquisitions are likely reconsidering such strategies. In addition, the travel industry is going to be among the hardest hit in a slow economic environment. Travel budgets (both personal and corporate) will undoubtedly be cut or reduced, diminishing the need for travel-related services.

It's not the best time for Boston Ventures to try to remove Northstar from its portfolio. Reasons for them doing so are unclear. It could be a while before any interested acquirers identify themselves.

LoopNet Enhances Offerings with REApplications Acquisition

LoopNet this week announced its acquisition of REApplications, a provider of on-demand commercial brokerage operations software. REApplications' solutions, which serve the commercial real estate market, are web-based and facilitate a variety of functions for managing market research, including property inventory; listings and comparables; commission management; customer relationship management (CRM); project tracking; and transaction management. LoopNet bought REApplications for an aggregate cash consideration of $9.4 million.

REApplications boasts an impressive list of commercial brokerage and property valuation firms, such as Coldwell Banker Commerical and Cushman &Wakefield LePage. REApplications will become a wholly-owned subsidiary of LoopNet, and the senior management team will remain in place.

This is yet another illustration of the value created from a data-software integration and it's certainly a big win for all of the involved parties. LoopNet is able to enhance its offerings and make them more valuable--and usable--to its current customers. At the same time, REApplications will likely yield growth it probably wouldn't have been able to achieve on its own as its solutions are placed in the hands of LoopNet customers--and that's a large group. LoopNet currently has more than 2.75 registered members. Lastly, customers of both LoopNet and REApplications will benefit from the efficiencies afforded by an integrated solution that enables them to more easily complete all tasks associated with the management and marketing activities.

In today's competitive marketplace, creating this data-software integration is a must. Customers need and demand valuable content packaged with services to create a complete solution to help them achieve their goals. That is exactly what LoopNet and REApplications are now positioned to provide.

LoopNet Expands Reach of Its Listings

Online commercial real estate marketplace LoopNet this week announced that its showcase property listings in the LoopNet.com marketplace will now appear on major search engines like Google and Yahoo as well as more than 100 websites of major newspapers--from The New York Times to the Dallas Morning News and The Wall Street Journal.

The LoopNet marketplace includes all commercial property categories, from office, industrial and retail to hotel, land and specialty properties. The site is used by commercial real estate agents to list properties for sale or lease. Those agents, as well as brokers, buyers and tenants use LoopNet listings to find available properties that meet their needs.

LoopNet already boasts an impressive customer list of commercial real estate firms, such as Century 21 Commercial, Cushman & Wakefield, Prudential and RE/MAX.

LoopNet's stature in the commercial real estate market has steadily increased over time and this latest announcement just emphasizes its growing profile in this industry. With this added exposure, LoopNet will be better able to serve the listing agent segment of its customer base by providing a larger showcase for its listings. Being aligned with LoopNet will also benefit the search engines and newspapers since it will greatly increase the number of listings they provide--which should yield more site visitors to their offerings in real estate as well as other advertising categories.

Do You Rate?

I continue to be intrigued by the strong growth of Angie's List, a subscription consumer rating service that now claims over 500,000 subscribers. That's an impressive number of subscribers for any kind of consumer information service, and it's even more impressive because its subscribers contribute all the content. Indeed, Angie's List has achieved so much success it's confronting novel new issues as it grows and matures.

Now, Angie's List is moving to expand its ratings beyond plumbers and home contractors to include physicians, pharmacists, dentists and even health plans. I wouldn't go so far as to call this move into healthcare a risky or gutsy one; indeed it makes perfect sense. What Angie's List is diving into, however, is the large, complex, emotional and politically-charged world of healthcare provider ratings. There have to be at least a dozen sites currently offering physician ratings alone - Xoova, Vitals.com, ZocDoc, are just a few that spring to mind. We also previously noted that even ratings pioneer Zagat's has entered the fray.

Rating physicians and dentists on one level is fairly easy. Anyone can opine on how nice they are, if their offices are clean, or if they were kept waiting. But these are so-called soft assessments. What really matters is not how nice a doctor is, but how competent a doctor is. That's where things get complicated and ugly. The healthcare industry's infighting over defining and executing "outcomes measurements" and a related issue of "risk adjustment" (essentially, adjusting scores to reflect providers that routinely deal with sicker patients) has been going on for years, with no resolution.

Angie's List is right to stick with soft assessments. They play to its strengths and are far less controversial (although a growing number of physicians are saying that being rated by patients isn't fair for various reasons). But here is what bears watching: How large and robust will these ratings become? Though Angie's List subscribers represent an active and engaged community that stands a distinct chance of raising the bar for healthcare provider assessments, the more the site tries to cover, the thinner its content becomes. If Angie's List rates 12 physicians in a major city, has it succeeded or failed? I don't think anyone yet knows the answer to that, so stay tuned.

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Labels: angie's list, vitals.com, xoova, zagat, zocdoc

A Ratings Ripple?

[Originally published 12/28/2007]

A small news item this week caught my eye: the owners of Angie's List, a service that rates home improvement and repair companies in a number of major cities, is suing yellow pages giant Ameritech Publishing. What Angie's List doesn't like is that some advertisers in the Ameritech directories are using the Angie's List logo in their ads as a way of indicating they were favorably rated by Angie's List.

My first reaction was that this was incredible free publicity for Angie's List, and they should be encouraging it, not going to court over it. Yet as I thought about it more, I started to see the other side of the issue.
First, if advertisers start to broadly include Angie's List "endorsements" in other publications, guess what? The need to purchase an Angie's List subscription is reduced. Cheap or lazy consumers can simply scan the yellow pages for companies sporting Angie's List logo and hire them with the knowledge they've been vetted by an independent review organization. Revenue to Angie's List: zero.

Second, Angie's List starts to lose control of its name and logo. A plumber well rated by Angie's List in January may not be well rated by December, but that annual yellow pages ad with the Angie's List logo keeps appearing, and appearing and appearing.

Third, people not familiar with Angie's List could easily be led to conclude that these advertisers have paid to be rated, which is not true. This leads to a distorted perception of Angie's List in the marketplace which could sully its brand over time. This is the primary reason that Consumer Reports has never let manufacturers advertise their Consumer Reports ratings; it doesn't want anyone jumping to conclusions about what it does or how it does it. If you want Consumer Reports information, you have to get it from Consumer Reports, which keeps control of the information, its presentation and its context in a way that enhances the brand.

Ratings services can have enormous market power, but they're like hothouse flowers: they will only flourish in a rigorously controlled environment. Let them into the outside world, and they quickly wither.

Labels: ameritech publishing, angie's list, consumer reports