Rightmove & rsquo;s biggest shareholder has described the site as an & lsquo;all you can eat & rsquo; model for agents & ndash; and says he regrets not buying more of the shares.
The fund manger of Baillie Gifford, which holds an 8.3% stake in the business, said that Rightmove & rsquo;s business model is so successful because it is & ndash; paradoxically & ndash; able to remove itself from the normal ups and downs of the property cycle.
Gerard Callahan said: & ldquo;The attraction of the Rightmove business to us is that it is not that sensitive to the housing market itself, unlike some of the operationally geared builders.
& ldquo;Rightmove is an & rsquo;all you can eat & rsquo; model for estate agents in the UK. They will pay & pound;500 for example and use Rightmove as much or as little as they can.
& ldquo;It is not transaction based but a flat fee that they generate. The importance of this is that as long as the estate agents don & rsquo;t go bust and they are still paying the flat fee, then Rightmove can hopefully grow their income. & rdquo;
Callahan says that his only regret is not doubling the fund & rsquo;s shareholding in Rightmove when it was hit hard in 2007/2008, when a number of agents closed branches or went out of business altogether.
He also says that any pick-up in the market, resulting from the Help to Buy initiatives announced in last month & rsquo;s Budget, can only help Rightmove & ndash; simply because agents will be happy to pay.
More at the link below.
Article courtesy of Estate Agent Today | Sign up for EAT newsletter | Get this news on YOUR site!