LoopNet

Infobox_Company
company_
company_name = LoopNet, Inc.
company_type = Public (ticker:LOOP)
foundation = 1995
location_city = flagicon|USA San Francisco, California
location_country = USA
key_people =
num_employees =
industry =
homepage = [http://www.loopnet.com/ www.loopnet.com]

LoopNet is a medium sized public company based in San Francisco, California.cite web|url=http://idc.api.edgar-online.com/efx_dll/edgarpro.dll?FetchFilingConvPDF1?SessionID=_m3iWyXg6lJqEfS&ID=5921493|title=LOOPNET, INC.FORM 10-Q|accessdate=2008-07-13] Its primary business is to provide commercial real estate listings (for sale and for lease) in the United States. LoopNet became a public company in Spring of 2006. [ [http://query.nytimes.com/gst/fullpage.html?res=9C04E5DF1431F936A35755C0A9609C8B63 NY Times] ] LoopNet has become regarded as one of the success stories to come out of the heady days of the "dot com" explosion during the 1990's. [ [http://www.fool.com/investing/small-cap/2007/12/31/best-stock-for-2008-loopnet.aspx Motley Fool Analysis of Current Business model] ]

History

LoopNet was founded in 1995 by several private investors. It rapidly acquired a user-base and underwent several rounds of private Venture Capital financing in 1997 (Indo Suez), 1998 (Trinity Capital & partners) and 1999 (multi-party investment including Goldman Sachs). [ [http://www.redherring.com/Home/6758 Red Herring article, 2000] ] It underwent a merger acquisition with a competitor in early 2001. By 2003 it is reported to have become profitable and by 2006 it was able to float shares in an initial public offering (NASDAQ:LOOP) (Credit Suisse was the lead underwriter). [ [http://investor.loopnet.com/releasedetail.cfm?ReleaseID=199733%20 LoopNet press release on IPO] ]

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. [ [http://www.nytimes.com/2007/04/13/realestate/15hunt.side.web.html?_r=1&oref=slogin NY Times discussion of LoopNet's business context] ]

Business model

LoopNet's current business model involves selling memberships to its site. Membership confers benefits that non-members do not enjoy. In 2008, LoopNet for the first time introduced tiered pricing structure for its memberships. (See Motley Fool article in Overview for more information)

Legal notability

LoopNet is mainly notable for having been sued by a competitor and for the resulting rulings and case law. The various rulings established important clarification of the DMCA and earlier cases ("The Betamax Case" and Church of Scientology v Netcom - see below).

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. [ [http://www.eff.org/cases/costar-v-loopnet CoStar v. LoopNet | Electronic Frontier Foundation ] ] 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 userbase. 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 similar Internet providers 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 theft.

Legal sidenote

In the CoStar v LoopNet 2004 appeals court case, Sony and other RIAA members submitted an amicus brief on behalf of CoStar. [ [http://www.eff.org/files/filenode/Costar_v_Loopnet/20040621CoStarOpinion.pdf EFF PDF of 2004 Ruling] ] Sony was widely lauded for its successful law suit in 1984 which established new "time shifting" copyrights (The Betamax Case). The rights that Sony established in 1984 became fundamental precedent in both the Netcom and LoopNet cases: establishing that a service provider who offers only "a method" for copyright violation is not liable for "an agent" who might actually commit a copyright violation.

References