MSN cuts mortgage software subsidiary

Following through on the bosses' calls for a more focused business model, Microsoft MSN yesterday announced it's selling the mortgage software subsidiary Home Advisor Technologies. Microsoft will continue to own and operate Home Advisor, a division of its MSN Web service. Home Advisor employs about 80 people in Gig Harbor.

Although technology companies around the nation have been slashing jobs recently to shore up balance sheets, Microsoft officials said they are merely refocusing their energies. They also said employees might keep their jobs because other companies want to buy the subsidiary.

"This underlying mortgage technology or loan platform, it wasn't what MSN should be doing to build MSN's success," said Brad Chase, senior vice president for MSN.

The sale ends a much-ballyhooed partnership between the company and several major lenders, including J.P. Morgan Chase & Co. and GMAC Residential Funding. Formed last March, Home Advisor was supposed to revolutionize homebuying, shave perhaps $2,000 off the cost of a mortgage and eventually go public as a separate company.

But so far, less than 4 percent of homebuyers have applied for mortgages online, and fewer than 1 percent closed a mortgage online, according to research by Gomez Advisors in Money Magazine. Microsoft is not abandoning the concept of online mortgages or homebuying, however. Microsoft will continue to offer such services through MSN's Home Advisor Web page, which refers users to mortgage companies and real estate listings, but it will no longer develop new software for online mortgage transactions.

In making the announcement, Chase echoed the new strategy outlined in recent months by Microsoft CEO Steve Ballmer and new President Rick Belluzzo: Build momentum while sharpening focus on core missions.

"As part of that effort we've been continuing to look at that business and what's core to that strategy and what's not core to the strategy," Chase said.

That focusing could lead to other MSN-related ventures being cut in the future, Chase said.

The mortgage technology is low-profile compared with the Sidewalk entertainment guide service, which was jettisoned in July 1999, and the TaxSaver software dropped last April in favor of a partnership with H&R Block.