By C.J. HughesSilicon Alley Reporter
In a turbulent year, it isn’t unusual to see a pure-play content site forced to launch a synergistic brick-and-mortar counterpart (Inside.com or Nerve, anyone?). Yet one Silicon Alley trade magazine publisher–Real Estate Media–is striking out in the opposite direction.
Eschewing conventional wisdom about online content’s money-pit qualities, Real Estate Media a few months ago launched GlobeSt.com. While the tech market may be contracting, Real Estate seeks to cash in on a still white-hot real-estate market, where brokers are hungry for up-to-the-minute news about the latest commercial deals. Company managers hope that a well-established brand name in print can buttress a related website, even if the look and feel of the site is substantially different than that of its offline counterpart.
Real Estate Media’s managers are sure of one point–GlobeSt’s services are a product of evolution.
“It’s a really exciting time to be in the publishing industry,” says Jonathan Schein, GlobeSt’s spectacled CEO, from his 17th floor corner office in the Garment District. “The ability to leverage what I had on the print side to online is wonderful.”
With dozens of daily editions, GlobeSt is more a newspaper than a magazine. On a typical day, it will churn out 80 commercial real estate stories covering 25 U.S. markets, with hourly updates.
Topics include everything from management shakeups to tenant deals, and features about the latest twists in leasing property. Users can point and click on a link to Seattle or San Jose for pieces with more niche-oriented geographical pegs. Plus, the site contains searchable archives and a ticker with breaking real-estate news.
GlobeSt is largely defining its space. Predecessors are few, and they have been only spottily successful; Ohio-based Teleres, for example, experimented with a host of different services, including ahead-of-its-time online listings. Those efforts weren’t enough to keep the company alive, however, and it folded in 1997 at a cost of $40 million.
“No one in the commercial real-estate space was doing this kind of content,” Schein boasts.
As for staying power, Schein definitely has the capital to go some of the distance, courtesy of U.S. Equity Partners (a fund sponsored by the deep-pocketed Wassertein Perella), to whom he sold the company in 1999. Even if his business-to-business content play isn’t currently profitable, Schein estimates that at its current burn rate, it’s covered for at least two years.
In the meantime, a revenue model is taking shape–a two-pronged approach that consists of both site banner advertising and revenue sharing with some popular real-estate marketplaces. Schein has inked deals with LoopNet and MortgageRamp to syndicate content in exchange for ad pages in the last two weeks.
There’s also the additional hope that these busy sites will help redirect traffic back to GlobeSt, which could use the stop-bys. Media Metrix, which sets the bar at 200,000 unique visitors per month, so far has no numbers on GlobeSt.
Still, the almost 3-month-old site is relatively young, and Schein has longer-term plans about how to increase profitability. One plan is to add e-commerce functionality to the site by merging with online listings services, so users could read about a property, then click to lease it.
“There’s always going to be a need for information, whether [it's] a good or bad market,” he says.
Yet there are critics; some accuse GlobeSt of trying to create need, rather than fill an existing one, in an overpopulated, overserved marketplace.
“Maybe one person needs [the service], but this is an eyeball-related business,” says Ken Patton, former president of the New York Real Estate Board and the current dean of New York University’s Real Estate Institute.
“We [realtors] are busy running around from one thing to another,” he says. “I think the volume here is going to be one person using it per company, as opposed to everybody using it at their desk.”
Schein is unfazed. Though GlobeSt may never achieve total market penetration, there are always Real Estate Media’s magazines, which have been the bedrock of the company since day one. And even though the tech market could tank–which could also send real-estate prices into a tailspin–Schein is at least upbeat about his books’ chances.
“Subscriptions go up in a bad market,” says Schein, “because people have lots of free time on their hands.