CoStar, a LOOP competitor, has filed a lawsuit againgst LOOP, questioning the methodology by which it reports some of its metrics.
CoStar Group Files Lawsuit in Dispute with LoopNet Inc.
Tuesday February 5, 4:09 pm ET
Company Questions Claims by LoopNet Regarding Registered Members
BETHESDA, Md., Feb. 5 /PRNewswire-FirstCall/ -- CoStar Group, Inc. (Nasdaq: CSGP - News) confirmed that it has filed a lawsuit against LoopNet, Inc. (Nasdaq: LOOP - News) in the United States District Court for the Southern District of New York in Manhattan today. The case is CoStar Group, Inc. v. LoopNet, Inc., Docket No. 08-cv-1156.
According to LoopNet, one of its key metrics reported to its customers and investors is how many "registered members" it has. As of November 2007, LoopNet claimed to have 2.5 million registered members. The lawsuit filed today raises questions about whether LoopNet has used this statistic in ways that imply that 2.5 million people use LoopNet, and about whether the actual number of people who use LoopNet is much lower.
In a November 2007 Credit Suisse First Boston investment conference, Richard Boyle, LoopNet's Chief Executive Officer and President, claimed that LoopNet had "2.4 million registered users at the end of the third quarter," which he described as "50% year over year growth."
comScore, Inc., the Internet audience measurement and ratings service LoopNet has cited in the past, has reported that the number of people who actually signed into LoopNet declined by 10%, from 573,790 in the fourth quarter of 2006 to 514,303 in the third quarter of 2007. (Source: comScore Q3 2007, CoStar Custom Visitation Analysis.) The following table shows the totals for the four most recent quarters for which data are available:
4th Quarter 1st Quarter 2nd Quarter 3rd Quarter
2006 2007 2007 2007
573,790 705,101 662,872 514,303
*SOURCE: comScore Q3 2007, CoStar Custom Visitation Analysis
comScore is a consumer-based panel used to measure Internet traffic and usage. For the purposes above, panel members who have "signed into" LoopNet are defined as anyone who visited one of the following URLs associated with log-ins to the LoopNet web site:
-- loopnet.com/xnet/mainsite/user/home/myloopnet.aspx
-- loopnet.com/xnet/mainsite/user/myaccount/memberbenefits.aspx
-- loopnet.com/xnet/mainsite/user/regvalidation.aspx
-- secure.loopnet.com/xnet/mainsite/looplender/success.aspx
Under comScore's methodology, if a person "signed into" LoopNet previously and had a cookie dropped on their machine, they would not have to sign in during their subsequent visits and may not be counted.
CoStar Group, Inc. provided LoopNet's attorneys with a courtesy copy of the complaint at approximately 11:35 a.m. PST. The complaint is available on the federal court's PACER electronic access center, located at ecf.nysd.uscourts.gov.
About CoStar Group, Inc.
CoStar Group, Inc. (Nasdaq: CSGP - News) is the number one provider of information services to commercial real estate professionals in the United States as well as the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information throughout the U.S. as well as in the United Kingdom and France. Headquartered in Bethesda, MD, the company has approximately 1,300 employees, including the largest professional research organization in the industry. For more information, visit www.costar.com.
This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations, beliefs, intentions or strategies regarding the future. These statements are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. More information about potential factors that could cause actual results to differ materially from those discussed in the forward- looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including CoStar's Form 10-K for the year ended December 31, 2006 and CoStar's Form 10-Q for the quarter ended September 30, 2007, under the heading "Risk Factors." All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements.
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Source: CoStar Group, Inc.
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