Public Disclosures Show That More Than 2.1 Million of Its 3.3 Million Registered Members (Also Referred to as Users) Never Logged On to LoopNet's Web Site in Recent 12-Month Period
BETHESDA, Md., Feb. 11, 2009 (GLOBE NEWSWIRE) -- It was disclosed in open court yesterday that more than 2.1 million of LoopNet's registered members, which it also refers to as "searchers" or "users," never logged on to LoopNet's web site over a one-year period ending in mid-January 2009. In addition, only 206,544 -- or approximately 6% of its claimed number of registered users had logged on to LoopNet's website over a 30-day period from mid-December 2008 to mid-January 2009.
The disclosure, which was made in federal court in the false advertising lawsuit brought by CoStar Group, Inc. (Nasdaq:CSGP), substantiates CoStar's claims that LoopNet grossly misrepresented the actual size of its online audience to give the impression that property listings placed on its site are exposed to a much larger online audience than is actually the case.
The record of actual log-ins is believed to be the first time LoopNet has ever disclosed the log-in activity of its registered users. LoopNet resisted producing the log-in records for the case. Only after being directly ordered to do so by the magistrate judge did LoopNet comply and release the log-in records for its users.
CoStar filed suit in federal court on February 5, 2008, alleging that LoopNet has engaged in a pattern of misleading statements involving exaggerated audience claims that constitute false advertising.(CoStar Group, Inc. v. LoopNet, Inc., Docket No. 08-cv-1156.)
CoStar Showcase, CoStar's internet marketing service, competes with LoopNet for listing content. CoStar believes real estate brokers with commercial property listings who are evaluating online marketing options give strong consideration to the number of users when deciding where to list their property online.
"Now that LoopNet has disclosed the true size of its online audience, we believe the commercial real estate community can now more accurately compare the effectiveness of our two services," CoStar General Counsel Jonathan Coleman said. "We think CoStar Showcase, with its many advantages to brokers and Internet users, can win any fair competition, undistorted by false audience claims."
"If a company chooses to disclose key facts about the size and effectiveness of its online service to potential customers, it must do so accurately," Coleman continued. "Prospective customers need to be able to trust that the information they are given for evaluating the online options for marketing their property listings is accurate and truthful, just as advertisers expect to receive accurate circulation figures or ratings from traditional media."
About CoStar Group, Inc.
CoStar Group, Inc. (Nasdaq:CSGP) is the number one provider of information/marketing 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 people working for the company worldwide, including the largest professional research organization in the industry. For more information, visit http://www.costar.com.
This news release includes 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, 2007, and CoStar's Form 10-Q for the quarter ended September 30, 2008, under the heading "Risk Factors." In addition to these statements, there can be no assurance that real estate brokers with commercial property listings who are evaluating online marketing options will give strong consideration to the number of users of a service when deciding where to list their property online; that, with access to the audience numbers revealed to the Court, the commercial real estate community will be able to more accurately compare the effectiveness of CoStar's and LoopNet's services; and that CoStar Showcase would win any fair competition that is undistorted by false audience claims. All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements.
CONTACT: CoStar Group, Inc. Analysts/Investors: Jonathan Coleman, General Counsel (301) 280-3859 firstname.lastname@example.org Media: Timothy J. Trainor, Communications Director (301) 280-7695 email@example.com