CoStar CEO calls trade secrets suit ‘laughable,’ looks to future 

Last week, the feud between top home search portal competitors Realtor.com and Homes.com entered a new phase with Realtor.com parent company Move Inc. filing a lawsuit against CoStar and a former employee who Move accused of spying for CoStar's benefit. 

CoStar CEO Andy Florance has responded to the lawsuit and its allegations, telling Real Estate News that the claims are "laughable" and that the dispute is rooted in the ongoing battle for traffic and agent attention. 

Florance also looked ahead to the next decade and opportunities that extend beyond the United States, saying that the company's new chief financial officer helps position CoStar to be "very active in M&A around the world."

A 'spy' — or a 'pawn'? 

In the complaint filed last week, Realtor.com alleged that James Kaminsky, a former editor for Realtor.com, "spied on Move's confidential documents at least 37 times after CoStar hired him" and "stole confidential business information, sending it to his personal email account on the last day he had access to Move's computer system."

Florance said he had never met Kaminsky, and described his role as "a junior employee whose job it is to edit descriptions and narratives written about individual condominium buildings in New York City."

"These are all things that were published that are out there. These are not trade secrets. These are articles," Florance said, adding that Kaminsky "had no non-compete agreement" and "no involvement in a proprietary or strategic element of CoStar Group or Homes.com." 

"Shame on [Realtor.com CEO] Damian [Eales] for taking this poor guy and using him as a pawn in a PR war. This guy has a right to earn a living, and he's not doing anything wrong."

Florance also denies that CoStar is seeking to duplicate Realtor.com's content strategy, noting that the company has been public about its content strategy for at least the last year. 

A 'PR stunt?' 

Florance repeatedly called the lawsuit from Move a "PR stunt" and claimed the competitor is suing CoStar "because their business model has an issue."

"When you're losing traffic and your business model is becoming outdated and unpopular, then what do you do? Well, if you're sophisticated media players, you begin to attack the credibility of your competitor," Florance told Real Estate News.

Florance said CoStar would "not abandon someone who's a victim in this," and vowed to back Kaminsky, adding that "perhaps Realtor.com should tighten up their network security if they're giving access to [former] employees."

A history of suing competitors?

Florance said the industry has seen similar action from Move (and News Corp) before, most notably when the company sued Zillow after it hired key executives ten years ago. 

"So the facts in that case were colorful, and there was a settlement. It involves officers of Realtor.com switching to Zillow. It involved real facts that were interesting. And this [new lawsuit] is a desperate attempt to recreate something that doesn't exist," Florance said.

"It's a very aggressive, underhanded PR stunt to try to cover for the fact that they are losing the audience war. They're losing the business model war."

The future for CoStar, Homes.com

Florance also discussed the role of CoStar's new Chief Financial Officer, Chris Lown, who officially started in July and comes to CoStar from federal mortgage giant Freddie Mac. But it's Lown's background in mergers and acquisitions that was key.

"He's an individual with experience in both real estate and the debt world, and then a wealth of experience in M&A," Florance said. "And as you know, CoStar Group is involved in both, and in our future — the next 10 years — we anticipate being very active in M&A around the world. And obviously there's a capital-raising function there."

Florance also touched on the leadership of Homes.com, where Florance has been in the driver's seat since the departure of Dave Mele. He said the company has plans to hire a new president soon: "I'm the interim president, and I'm looking to become unemployed," he said.