I recently interviewed LoopNet (NASDAQ:LOOP) CEO Richard Boyle, in anticipation of the Rule Breakers team's trek out to Silicon Valley later this month. Running what Boyle describes as "sort of an eBay (NASDAQ:EBAY) for commercial real estate" has served the company well.

Shielded from broader weakness on the residential side and powered by a popular online platform, LoopNet has become the leader in commercial real estate, boasting 623,000 listings as of the end of June. Revenue grew by 29% in its latest quarter.

Online lead generation can be a hit or miss business. Companies like Bankrate.com (NASDAQ:RATE) and Google (NASDAQ:GOOG) are doing well, while others like House Values (NASDAQ:SOLD) have hit resistance.

I asked Boyle about the company's prospects and its competition. This is what he had to say:

Rick Aristotle Munarriz: Commercial real estate has obviously held up better than residential real estate, but is that a relative compliment these days?

Richard Boyle: The commercial real estate in general has been healthier than residential, particularly as it relates to the leasing side of the business.

The investment sale side of the business is separated out for a moment into asset values and transaction volumes. So asset values are actually holding up quite a bit better than the residential world. The asking prices of buildings are down maybe 5% or so in the last year, where in certain residential markets like I think Las Vegas is down 25% or something like that. However, that really has no impact on LoopNet's business. We are basically the matchmaking service, regardless of what the asset value is, so whether asset prices go up or down is somewhat irrelevant to us.

On the other hand, transaction volumes in the investment sale market are down dramatically. There are some third-party reports from a big real estate services firm called CB Richard Ellis (NYSE:CBG). On its earnings call a couple weeks ago the firm said that transaction volume, year-to-date, for the first half of 2008 versus the first half of 2007 went down something like 70% on a year-to-year basis. A massive drop in transaction volume, but not much drop in asset prices yet, which is part of the reason that transaction volume is down so much.

RAM: CoStar (NASDAQ:CSGP) is getting a lot of attention lately. It's your publicly traded rival and maybe potential thief or whatever the accusations are as they fly about. CoStar is growing pretty quickly. What is your opinion of the company? What can you tell me about the litigation, which I know won't be much, and how is your company different than CoStar?

RB: The company is really quite different. On the litigation front, you are right. I really can't talk too much. We did get a few investors who were asking questions about it and what we chose to do was post a written update on the litigation situation on our website, so it is at LoopNet.com/litigation and it went out basically about three or four weeks ago and gave a pretty comprehensive overview of our view of the litigation situation and frankly not much has changed since then, so it is still a pretty up-to-date scenario.

But basically the short version is we had to sue them because we believe they are taking listings content from our system, which we don't allow competitors to do. In terms of the businesses, they are really quite different, so to your original question, I sort of described it as an eBay for commercial real estate. They like to describe themselves as a Bloomberg for commercial real estate. The key differences at the end of the day are they have got something like a thousand people on staff who are researchers who gather very detailed information about the big high-end properties in the major metro areas, package it with a bunch of sophisticated analytics, sell access to it at a very high price point as compared to LoopNet. It is really sort of a research and analytics tool that would be used by say a high-end institutional investor or somebody like that.

LoopNet is much more of a marketing service, so if you are a high-end broker at a big firm like CB Richard Ellis, you would be using both services, just for very different things. You would use CoStar for research and analytics and you would use LoopNet for marketing services if you are marketing a space for lease, you would use LoopNet to try and attract a tenant to that space.

RAM: Most of your paying customers are brokers with properties to list, but 43% are not as of this past quarter. What is the attraction of paying LoopNet to be a member if you just want to check out the listings?

RB: It is really access to enhanced information, so if you were somebody who is coming on the demand side -- and a great example would be an investor who is looking for buildings to buy --you would pay us $50 a month to be a searching subscriber. What you get is more listings information available to you, so you can see more listings that are on the market that might be interesting for you to buy and you also get a professional tool set to help you look at maps and reports and demographic data and a bunch of other decision-support information that you would typically want to have available to you before you made a million-dollar investment decision in terms of buying a piece of commercial property. So it is people that are looking for buildings to buy that they are going to ultimately write a very large investment check to make that purchase decision and they are willing to pay us the $50 a month subscription to get enhanced information about available properties and other information related to the market to help them make that decision.

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Longtime Fool contributor Rick Munarriz has never dabbled in commercial real estate outside of the Monopoly board, though he wants you to know that he can hand you Boardwalk and Park Place at the beginning of the game and still beat you. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.