Giaimo Vows To Make HomeSeekers Profitable
Wall street has not been patient with dotcoms this year, even those that no longer qualify as start-ups. HomeSeekers has weathered every challenge a company can face from competition to profitability. Now HomeSeekers' board is putting the company back in the hands of the man who started the whole thing, back when the other Bush was President.
When Giaimo first started HomeSeekers back in 1990, the company was the first to have listings on kiosks. People walking the shopping mall could stop and see the latest homes for sale, but the kiosks represented the first form of public aggregated listings. Evolving to the Internet, Giaimo sold the company to NDS Software in 1996, which eventually took HomeSeekers public. By 1999, HomeSeekers was no longer trading over the counter but had achieved a listing on the NASDAQ (HMSK.) The company quickly went from about $6 a share to the mid-20s on such reports as a technology contract with Donald Trump, and it's new Internet MLS services division which promised to capture lucrative and renewable MLS contracts from equipment-weary MLS organizations.
But the wave of success for the company was soon over as the dotcom tsunami flooded veterans as well as startups. HomeSeekers filed a shelf with the Securities and Exchange Commission to sell up to $75 million in common stock warrants in one or more offerings in March 2000, but along with the financing dreams of many other dotcoms, the filing evaporated. Second round financing problems were compounded by the building of the new multi-million-dollar MLS infrastructure, with no planned revenue return until January 2001 when the parallel MLS systems would go online and HomeSeekers could begin collecting. By June, HomeSeekers was economizing on staff, prompting a competitor to tell prospective clients that HomeSeekers was going out of business. A suit is still pending.
Just when things couldn't appear to get any worse, they did. HomeSeekers watched its stock plummet to below $1 a share.
Throughout one of the toughest summers any president should ever have to face, John Giaimo plowed ahead and brought closure to a deal that he had been working on for months. In January, HomeSeekers will become the real estate technology and marketing services provider for the world's largest marketplace - eBay.
The stock market didn't quite get the significance, but it will sooner or later. This is a deal that would make front-page real estate news regardless of the economic climate. eBay has found a way to get a piece of the $906 billion real estate industry, where approximately $46 billion is paid in real estate commissions annually. Getting a piece of this is something Homestore is prevented from doing in its agreement with the N.A.R. eBay is the premier consumer to consumer site on the Internet, but that doesn't mean that eBay is going to settle for FSBO chump change. FSBOs are estimated to be about fifteen percent of homes sold in the U.S., about $136 billion annually. No, eBay is going to go for broker-represented homes, too, in a new marketing and management program designed and fulfilled by HomeSeekers.
Welcome back from the brink, John.
B.E.: You must be feeling pretty good about now.
J.G.: It's nice not to have a boss anymore. I'm so excited to have free rein. I've received so many e-mails and voice mails from the investment community and over 200 of our 300 employees have personally written me, so it is good to know that I have support. But you bask in that for about 10 minutes, then it's back to work
B.E.: You are back where you started. What happened?
J.G.: There comes a time in any company that the direction of current leadership needs a change. If you are a shoe store manager or a public company, if the boss isn't making it happen then the performance is evaluated, and they go to the person who they think can bring it to the next level.
B.E.: But the board didn't go outside. It picked you.
J.G.: If this were a pure stock play, our board could have gone out and found a Fortune 100 guy. With me, there is no down time, no learning curve for a new CEO to learn a new business, I don't think anyone could have as much passion for HomeSeekers as I do.
B.E.: You literally faced every challenge the emerging Net could throw at you.
J.G.: And they aren't done! (Laughs.) I used to joke that my worst nightmares have come true, Microsoft, and Homestore and since then having our auditors have concerns about our ability to get profitable. But that is part of the growing pains. In 1996, we had 18 people and today we have 326. It has its challenges, I take personally to heart all 326 people in terms of the company's viability.
It has certainly not been a fun ride, but if challenges build character, then I've got it.
B.E.: HomeSeekers has shown character, too.
J.G.: I need to reinforce the fact that the company is looking better than ever, when we announce the January quarter, we have reduced our burn, added revenues. January will be a knockout quarter.
B.E.: How? Let's go section by section. Let's start with eBay. Can you let any details loose on what agents and consumers can expect from the new site?
J.G.: In February, we will launch the real estate section. So far the attitude from the industry has been very positive, but we can't announce anything yet. eBay is the pacing item. They are reluctant to let anything out but I can let more detail out later. It has been an ongoing process to come up with an absolute model and kick it off by January.
B.E.: You're in third place as far as number of seats served in MLS information management, but you are right up there with VISTAinfo and Interealty in terms of number of Internet-based parallel and stand-alone systems.
J.G.: That's what we have been building for the past year. The installations are taking place in the first quarter, and we have done the heavy lifting. We'll be starting the training process on how to use the new MLS product on the Web, and that gives us more opportunity to be in front of agents. Once the training is complete, the sites go live and the checks start coming. This has contributed to the massive burn rate, we had to build the house and fund it and you don't get your money until final completion, so we are excited that they are going to start generating revenue. We have much to do now, our sales staff is still fully engaged and we are focused on doing a good job for our current contracts.
B.E.: Agent Web sites.
J.G.: In the first quarter Web site sales have typically done well. The agents get off holiday season and they say now I'm going to do something about this Internet thing. It is a New Year's resolution. We are one of the competing products out there and we can capture this fresh attitude.
B.E.: Any more?
J.G.: Desktop IRIS. There are new products being launched in the first quarter, but that is all I can say about that.
My focus is to get this company to be a very profitable operation and that is where the drive and focus is. We have some terrific people and products and under my direction that is what will happen.
We're also going to be announcing some new people. We have some great talent to choose from.
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