LoopNet

LoopNet, Inc.
Subsidiary of CoStar Group, Inc.
Industry Technology
Founded 1995
Headquarters San Francisco, California, USA
Website www.loopnet.com

LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 8 million registered members and 5 million unique monthly visitors.[1] Its primary business is to provide commercial real estate listings (for sale and for lease) in the United States. In April 2012, LoopNet became a subsidiary of CoStar Group, Inc.[2]

History

LoopNet was founded and funded in 1995 by Dennis DeAndre. Working alongside Steve Midgley, LoopNet's engineer, DeAndre and Midgley built LoopNet into the Internet's largest commercial real estate listing service. LoopNet then underwent three rounds of private Venture Capital financing in 1997 (Indo Suez), 1998 (Trinity Capital & partners) and 1999 (multi-party investment).[3] By 2003 it is reported to have become profitable and by 2006 it was able to float shares in an initial public offering. In April 2011, CoStar Group, Inc. announced an agreement to acquire LoopNet for about $860 million in cash and stock.[4] The acquisition was finalized on April 30, 2012.[5]

As with many Internet sites, the site offered the bulk of its services at no cost until it built its viewer base.

Business

LoopNet was an early venture in Internet-based user-created content. As early as October 1996 virtually all of its commercial property listings were being entered by its users directly. Over time, LoopNet added the capability to import listings in an automated manner. But the core principles of its business: connecting sellers with buyers over an open and free network have remained unchanged to the present day.[6]

LoopNet's current business model involves selling memberships to its site. Paid or Premium Membership confers benefits that free, non-members do not enjoy. This revenue model was launched in Q4 2001, and LoopNet was one of the first internet companies to successfully launch and scale a so-called "Freemium" model for its services. In 2008, LoopNet for the first time introduced a tiered pricing structure for its memberships.[7]

Legal issues

LoopNet is also notable for having been sued by competitor CoStar Group and for the resulting rulings and case law. CoStar ultimately acquired LoopNet in April 2012. Prior to that time, the various rulings established important clarification of the DMCA and earlier cases.

The case itself has become known for establishing new case law in the area of ISP responsibilities for user created content. An additional brief summary of the case to date can be found on the Electronic Frontier Foundation's website.[8] The case followed close on the heels of the relatively better known CoS v Netcom case (better known as Scientology vs. the Internet), though LoopNet's case has since become a protracted legal battle between the two rival companies, apparently concluding in a final appellate ruling in 2006, almost 9 years after the original action was filed.

LoopNet was successfully able to adopt a defense that asserted that, as an operator of an Internet website, it was no different from Netcom (at the time a dial-up internet connectivity provider), and was therefore only a by-stander to the copyright violations of its user base. This ruling has provided crucial precedent and copyright liability protection for vast numbers of similar websites since.

LoopNet was able to show that it already policed any user violations after the fact and was able to avoid being required by the court to stop future violations before they occur (such a ruling could have effectively shut down LoopNet's website, and opened the door to many more Internet ASP's being similarly shut down by the courts). CoStar unsuccessfully argued that LoopNet was an active party to the violations and therefore guilty itself of copyright violation.

Rebranding

As part of a greater CoStar rebranding, LoopNet released a new logo on its website in May 2014.

LoopNet Logo 1995 - 2014

References

  1. ↑ [According to April 2012 Google Analytics data]
  2. ↑ CoStar Press Release on Closure of LoopNet Acquisition, April 2012
  3. ↑ Red Herring article, 2000
  4. ↑ Reuters.com - CoStar Group to buy LoopNet for $860 mln
  5. ↑ CoStar Press Release on Closure of LoopNet Acquisition
  6. ↑ NY Times discussion of LoopNet's business context
  7. ↑ Best Stock for 2008: LoopNet Motley Fool, December 31, 2007
  8. ↑ CoStar v. LoopNet | Electronic Frontier Foundation

External links

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