Today EDR has announced and will begin implementing a reorganizational plan which has been developed over the past few months. This plan is a direct response to the decline in real estate transactions we have witnessed since the credit crunch began in August 2007. As I have mentioned in earlier blog posts, and despite the benefit of a growing customer base of environmental professionals, the volume of monthly transactions in the marketplace has declined by 8 percent. This reorganizational plan has several elements to it which I will now attempt to outline.

Twenty seven positions across the company have been eliminated causing layoffs. However, 7 of these people have been offered new positions within EDR and all will have a few days to consider their new offer. I expect that once their decisions have been made, the net number of layoffs will be between 20 and 22. To put this into some perspective, EDR's employee base has grown by 30 people since February 2007. These layoffs will reduce this to about 10 to 12 new positions created since last year.

This reorganization plan will also include a restructuring of our outside sales team. Since the 1990's, EDR's field sales team has been organized by geography with each sales person having an assigned territory. Going forward, we will shift to a new sales model that is organized not by geographical boundaries but instead by customers. Sales professionals will now be assigned specific customers for which they will be responsible. The goal of this new sales model is to better align EDR personnel with our clients businesses in order to develop stronger individual relationships and mutually beneficial partnerships.

In addition to the downsizing and reorganization on the employment side, a new operating plan will also be implemented for the remainder of this fiscal year. This new operating plan calls for cost reductions in areas including advertising, promotions and events and will reduce total operating expenses to a level similar to last year.

As you might imagine, a situation like this is difficult for everyone involved, most especially those people who have been laid off. I wish each person the best of luck as they begin seeking new employment and career opportunities and offer a "thank you" for their contribution to EDR's success over the years.

Going forward I believe that EDR's employment and operating plan is now aligned with the current state of the real estate markets. Since 1998 we have enjoyed a commercial real estate market that has been in near constant expansion. This changed virtually overnight last August and the ripple effects are still evident. My hope is that this period of contraction will be shallow and short lived and that our markets will begin expanding again later this year.

For three days this week, some colleagues and I attended the Software & Information Industry Association (SIIA) Summit in New York. The event pulled together a broad range of business executives from both the content world and the software world to discuss emerging trends and the rapid rate of change that the internet has brought upon all of us.

For me, the best part of the conference was seeing firsthand that the things EDR is dealing with are the same things that all other content companies are dealing with and essentially confirming that we're not "off the reservation". For example, there was a lot of discussion about how content companies must expand into the software space in order to add value to our content. Increasily, content must be delivered into applications that then help the consumer work with the information more efficiently in order to, ultimately, make better business decisions. In EDR's case, simply dropping a report into someone's lap won't cut it in the future. Instead, our content must instantly and seemlessly be delivered electronically into workflow tools. Here our content co-exists with other content elements to create a more valuable experience for the user.

Two other major themes of the conference were "community" and the role of "user generated content". Today a large percentage of our employees and customers are members of various social networking communities. The biggest of these are obviously MySpace and FaceBook. Both communities are great for personal social interaction but neither really provides a lot of benefits to businesses communities. This is causing the creation of literally thousands (or more) niche business social networking communities built around very precise business areas. Communities exist now for oncologists, scuba divers and model train enthusiasts. Members in these niche communities now have a place where they can go that is geared exclusively towards very finite topics and activities and, as a result, the user experience is much more valuable. The result is that these niche communities then become a place where very specialized user generated content is created and shared and everyone in the community benefits.

I think the property due diligence industry is perfectly suited to benefit from these rapid changes and trends made possible by the internet and broadband connectivity. Like all other industries, we too can expect to see continued convergence between content, software and community.