Comments on: Google barges in to the real estate market http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/ now with extra source Sun, 22 Nov 2009 09:45:57 +1100 http://wordpress.org/?v=2.8.6 hourly 1 By: arek http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30935 arek Sat, 11 Jul 2009 02:10:50 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30935 Hi Simon and thanks for sharing your views. I am a total outsider to real estate industry so I should declare up front that I am only drawing on related experience. I agree that it's not about panicking and that changes will not happen overnight. At the same time I would also argue that aggressive response is highly warranted. If not for other reasons, just to send a clear message to the competition and investors that the companies are prepared to defend their turf AND that they have a strategy in place to deal with the situation. As the saying goes, "it's not about what happens to you that matters, but how you respond to it". The official "wait and see" position doesn't give much confidence to their clients and investors… One only has to recall why realestate.com.au, seek.com.au or carsales.com.au exist in the first place - because News and Fairfax "stuffed up" at some point… they displayed the same attitude "we are market leaders why should we be worried?". The history is often repeated so why can't it happen to those companies as well? Let me quote another saying that "prevention is better than treatment" so, waiting for the evidence of business erosion is more riskier approach in my opinion than preemptive response. Agree totally with your other point that free is not always the best competitive advantage. The sites you mentioned faced really big challenges because they not only had to sign up agents (for free) but also attract traffic at the same time (primarily pay for it). The difference is that Google already has a huge user base and they have a track record of turning commercial services into freebies (online maps is an example). True, they can't offer much in terms of services to agents or people but I believe there will be plenty of intermediaries willing to take on those various roles you mentioned, once Google releases the inventory as a web service. Till this point in time the two companies controlled to a large degree the whole process: relationship with agents, listing process, page creation, and branding and marketing to attract visitors. Now, "thanks" to Google, it can all be broken up, with Google being in a center and as a conduit between people looking for a property to rent or buy or else, and … suppliers of properties at the other end (not necessary agents!). This is the true business Google is in - matching searchers with source information they are looking for. And this is where it gets interesting because the events of this week opened up a whole new range of opportunities for companies from outside the current industry. I won't go into details but it is not difficult to imagine, maybe highly improbable at this stage but plausible situation, that real estate agents and companies servicing them can be totally circumvented in the process… In my opinion, <a href="http://all-things-spatial.blogspot.com/2009/06/golden-rule-of-online-business-traffic.html" rel="nofollow">traffic is the main asset</a> of realestate.com.au and similar companies, not the relationship with agents. They may sign up all the agents that are in this country and have the best tools for them but if there is no one at the other end to click on the listings, they will be out of business pretty quickly. If you believe Google trends statistics the traffic to realestae.com.au has already slowed down so, whether with or without Google presence, the company should already be doing something about it. Joining Google would give them at least the opportunity for some extra traffic. As mentioned in my previous post, it will be interesting to see if the difference in the approach, here and in NZ, leads to different outcomes. Regards Arek http://all-things-spatial.blogspot.com/ Hi Simon and thanks for sharing your views. I am a total outsider to real estate industry so I should declare up front that I am only drawing on related experience.

I agree that it’s not about panicking and that changes will not happen overnight. At the same time I would also argue that aggressive response is highly warranted. If not for other reasons, just to send a clear message to the competition and investors that the companies are prepared to defend their turf AND that they have a strategy in place to deal with the situation. As the saying goes, “it’s not about what happens to you that matters, but how you respond to it”. The official “wait and see” position doesn’t give much confidence to their clients and investors… One only has to recall why realestate.com.au, seek.com.au or carsales.com.au exist in the first place - because News and Fairfax “stuffed up” at some point… they displayed the same attitude “we are market leaders why should we be worried?”. The history is often repeated so why can’t it happen to those companies as well? Let me quote another saying that “prevention is better than treatment” so, waiting for the evidence of business erosion is more riskier approach in my opinion than preemptive response.

Agree totally with your other point that free is not always the best competitive advantage. The sites you mentioned faced really big challenges because they not only had to sign up agents (for free) but also attract traffic at the same time (primarily pay for it). The difference is that Google already has a huge user base and they have a track record of turning commercial services into freebies (online maps is an example). True, they can’t offer much in terms of services to agents or people but I believe there will be plenty of intermediaries willing to take on those various roles you mentioned, once Google releases the inventory as a web service.

Till this point in time the two companies controlled to a large degree the whole process: relationship with agents, listing process, page creation, and branding and marketing to attract visitors. Now, “thanks” to Google, it can all be broken up, with Google being in a center and as a conduit between people looking for a property to rent or buy or else, and … suppliers of properties at the other end (not necessary agents!). This is the true business Google is in - matching searchers with source information they are looking for. And this is where it gets interesting because the events of this week opened up a whole new range of opportunities for companies from outside the current industry. I won’t go into details but it is not difficult to imagine, maybe highly improbable at this stage but plausible situation, that real estate agents and companies servicing them can be totally circumvented in the process…

In my opinion, traffic is the main asset of realestate.com.au and similar companies, not the relationship with agents. They may sign up all the agents that are in this country and have the best tools for them but if there is no one at the other end to click on the listings, they will be out of business pretty quickly. If you believe Google trends statistics the traffic to realestae.com.au has already slowed down so, whether with or without Google presence, the company should already be doing something about it. Joining Google would give them at least the opportunity for some extra traffic. As mentioned in my previous post, it will be interesting to see if the difference in the approach, here and in NZ, leads to different outcomes.

Regards
Arek
http://all-things-spatial.blogspot.com/

]]> By: sbaker http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30838 sbaker Thu, 09 Jul 2009 13:41:46 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30838 Arek - Thanks for this. The question about needing to respond is an interesting one. At the moment all Google has done is put real estate listings from its Google Base product on a map. It has yet to do drive traffic to those maps, drive significant leads to the agents, and it has yet to impact on the businesses of realestate.com.au and domain.com.au. Free models have been around for ages so there is not real paradigm shift here. Myhome is free in Australia and in the UK, there have been a number of attempt at free – including Globrix funded by News. All of these have yet to knock off or impact a market leader. I well remember when Justlisted (funded by Telstra) and Myhome (funded by Packer) entered the Australian market. Many people, including senior people at News, said “what are you going to do?” My response was to wait and see how much impact they really did have on the business. Causing panic is not smart but being vigilante and cautious is. What we do know is that if there are any changes, they will not be overnight but over a period of time. If traffic gradually decreases to realestate.com.au or domain.com.au then there is an indicator. If agents don’t renew their subscriptions, then there is another indicator. Until these occur, you are shooting in the dark. The fundamental core tenants of business should not change – great service (which Google cant do as there is no help line), clear articulation of the differences (e.g. private listings on Google or potential scam / phishing on Google), and continued development of new products. Remember, Google doesn’t have email alerts, premium products for agents to differentiate themselves, or simple lead generation. Simon Baker www.propertyportalwatch.com Arek - Thanks for this.

The question about needing to respond is an interesting one. At the moment all Google has done is put real estate listings from its Google Base product on a map. It has yet to do drive traffic to those maps, drive significant leads to the agents, and it has yet to impact on the businesses of realestate.com.au and domain.com.au.

Free models have been around for ages so there is not real paradigm shift here. Myhome is free in Australia and in the UK, there have been a number of attempt at free – including Globrix funded by News. All of these have yet to knock off or impact a market leader.

I well remember when Justlisted (funded by Telstra) and Myhome (funded by Packer) entered the Australian market. Many people, including senior people at News, said “what are you going to do?” My response was to wait and see how much impact they really did have on the business. Causing panic is not smart but being vigilante and cautious is.

What we do know is that if there are any changes, they will not be overnight but over a period of time. If traffic gradually decreases to realestate.com.au or domain.com.au then there is an indicator. If agents don’t renew their subscriptions, then there is another indicator. Until these occur, you are shooting in the dark.

The fundamental core tenants of business should not change – great service (which Google cant do as there is no help line), clear articulation of the differences (e.g. private listings on Google or potential scam / phishing on Google), and continued development of new products. Remember, Google doesn’t have email alerts, premium products for agents to differentiate themselves, or simple lead generation.

Simon Baker
http://www.propertyportalwatch.com

]]> By: arek http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30827 arek Thu, 09 Jul 2009 09:22:43 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30827 Hi Simon, I agree that Google is not always successful or gains dominating share of the market it enters into. However, considering the relative size of the company and its global reach, it can afford a few misses. This cannot be said about REA Group or Fairfax (both under significant pressure - one consolidating and pulling out of overseas markets and the other suffering from general media slump). In my humble opinion they have only one chance to get it right. Whenever Google enters a particular market it creates a disruption and, whether they are successful or not, the return to status quo is no longer possible. Therefore doing nothing is not an option for the incumbents. How long will it take to for investor to start asking "why haven't they see it coming" and "what are they going to do about it"? They have to have a response that can be perceived as adequate to protect the dominant position. If Google was going head to head with REA Group and Fairfax (ie. signing up agents to list for a fee) I agree, they would have a tough battle on their hands. However, the company did a classic "paradigm shift" in defining this game. Google is only interested in "eyeballs" and may not necessarily see itself as "competing" in the real estate listing industry. Rather as "facilitating user access to relevant information". This is certainly the view NZ market leader realestate.co.nz took embracing partnership with Google from day one. In this scenario it is quite possible that Google will be a dominant search platform for real estate listings and will drive traffic to landing pages on real estate portals which will continue to service that traffic as they do now. It will be interesting to observe how things pan out at both ends of Tasman Sea. I am drawing analogies from another industry that I closely monitor - online mapping - where Telstra and Google are in direct competition. The "free giveaway" approach from Google (paradigm shift at work again!) was no match for a small, in global terms, company who initially totally dismissed the threat based on its dominant market position in Australia. The lack of decisive response led to loosing that position. It very much resembles how REA Group and Farifax are now responding. In the end Telstra decided to join Google in local listing search market rather than risking loosing another battle. Arek Drozda http://all-things-spatial.blogspot.com/ Hi Simon,

I agree that Google is not always successful or gains dominating share of the market it enters into. However, considering the relative size of the company and its global reach, it can afford a few misses. This cannot be said about REA Group or Fairfax (both under significant pressure - one consolidating and pulling out of overseas markets and the other suffering from general media slump). In my humble opinion they have only one chance to get it right.

Whenever Google enters a particular market it creates a disruption and, whether they are successful or not, the return to status quo is no longer possible. Therefore doing nothing is not an option for the incumbents. How long will it take to for investor to start asking “why haven’t they see it coming” and “what are they going to do about it”? They have to have a response that can be perceived as adequate to protect the dominant position.

If Google was going head to head with REA Group and Fairfax (ie. signing up agents to list for a fee) I agree, they would have a tough battle on their hands. However, the company did a classic “paradigm shift” in defining this game. Google is only interested in “eyeballs” and may not necessarily see itself as “competing” in the real estate listing industry. Rather as “facilitating user access to relevant information”. This is certainly the view NZ market leader realestate.co.nz took embracing partnership with Google from day one. In this scenario it is quite possible that Google will be a dominant search platform for real estate listings and will drive traffic to landing pages on real estate portals which will continue to service that traffic as they do now. It will be interesting to observe how things pan out at both ends of Tasman Sea.

I am drawing analogies from another industry that I closely monitor - online mapping - where Telstra and Google are in direct competition. The “free giveaway” approach from Google (paradigm shift at work again!) was no match for a small, in global terms, company who initially totally dismissed the threat based on its dominant market position in Australia. The lack of decisive response led to loosing that position. It very much resembles how REA Group and Farifax are now responding. In the end Telstra decided to join Google in local listing search market rather than risking loosing another battle.

Arek Drozda
http://all-things-spatial.blogspot.com/

]]> By: Christine Johnson http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30729 Christine Johnson Wed, 08 Jul 2009 23:19:26 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30729 Google property listings is brilliant! Realestate.com and domain have been clunky & slow. I'm sold. Google property listings is brilliant! Realestate.com and domain have been clunky & slow. I’m sold.

]]> By: sbaker http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30720 sbaker Wed, 08 Jul 2009 17:56:49 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30720 Arek Why do the incumbents need to respond? They are the incumbents and Google Real Estate is the new boy on the block. Lets see how they perform over the next 6 months. Also, Google does not dominate everything it does. Heard of Froogle - it doesnt dominate its space. Look at Chrome ... its entered the market and has not displaced IE or Firefox ... and then there is Bing and its impact on Google's core business. I wouldnt be jumping on the bandwagon just yet. Simon Baker www.propertyportalwatch.com Arek

Why do the incumbents need to respond? They are the incumbents and Google Real Estate is the new boy on the block. Lets see how they perform over the next 6 months.

Also, Google does not dominate everything it does. Heard of Froogle - it doesnt dominate its space. Look at Chrome … its entered the market and has not displaced IE or Firefox … and then there is Bing and its impact on Google’s core business.

I wouldnt be jumping on the bandwagon just yet.

Simon Baker
http://www.propertyportalwatch.com

]]> By: Adam Dunsford http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30718 Adam Dunsford Wed, 08 Jul 2009 14:08:38 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30718 I'm actually searching for a house to buy at the moment and have tried out Google's real estate search. It is very nice and is easier to use than most other web sites. Unfortunately is is missing something critical. Other sites have a feedback/contact link so you can report problems. Google does not, so there is no way for me to tell them that many of the houses that they are showing are not on the market and were sold long ago.... I’m actually searching for a house to buy at the moment and have tried out Google’s real estate search. It is very nice and is easier to use than most other web sites. Unfortunately is is missing something critical.
Other sites have a feedback/contact link so you can report problems. Google does not, so there is no way for me to tell them that many of the houses that they are showing are not on the market and were sold long ago….

]]> By: arek http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30703 arek Wed, 08 Jul 2009 09:44:11 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30703 I am surprised that there is no official response from major portals. No one can ignore “the Google effect” so, is only a matter of time that it will dominate the category. If realestate.com.au and domain.com.au have smart strategists and they act aggressively now, they can slow the pace of structural changes in the industry but they cannot prevent them. Google has many advantages over its competitors: . large user base (9.5 million comparing to combined 6 millon for realestate.com.au and domain.com.au); . dominant search engine to drive the traffic for free; . independent developer community to cover market niches (and further fragment the market) when Google releases the inventory as a web service; and . mobile market presence (and possibly soon the dominating position) I have covered the above points in more details on my blog all-things-spatial.blogspot.com: http://all-things-spatial.blogspot.com/2009/07/google-threat-to-real-estate-listing.html I am surprised that there is no official response from major portals. No one can ignore “the Google effect” so, is only a matter of time that it will dominate the category. If realestate.com.au and domain.com.au have smart strategists and they act aggressively now, they can slow the pace of structural changes in the industry but they cannot prevent them. Google has many advantages over its competitors:

. large user base (9.5 million comparing to combined 6 millon for realestate.com.au and domain.com.au);
. dominant search engine to drive the traffic for free;
. independent developer community to cover market niches (and further fragment the market) when Google releases the inventory as a web service; and
. mobile market presence (and possibly soon the dominating position)

I have covered the above points in more details on my blog all-things-spatial.blogspot.com:
http://all-things-spatial.blogspot.com/2009/07/google-threat-to-real-estate-listing.html

]]> By: martin downs http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30613 martin downs Tue, 07 Jul 2009 23:14:22 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30613 If it is more user friendly, feature friendly and cheaper - i mean free i think i know who is going to win out in the long run, thats capitalism kids! Long live the unregulated monopoly?! If it is more user friendly, feature friendly and cheaper - i mean free i think i know who is going to win out in the long run, thats capitalism kids! Long live the unregulated monopoly?!

]]> By: sbaker http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30569 sbaker Tue, 07 Jul 2009 07:35:38 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30569 I didnt refer to allhomes as it is a small site in Australia. Yes it is popular in the ACT however its coverage doesnt really extend beyond there. As for market share, well that depends on how you measure market share. Most, if not all, agents on allhomes are probably on realestate.com.au and / or domain.com.au. As for functionality, well allhomes has mapping as does myhome, homehound and many others. The point being that mapping is not unique and what google really brings to the party is a free to list site with potentially access to significant traffic. Lets see how they really go. Simon Baker www.propertyportalwatch.com I didnt refer to allhomes as it is a small site in Australia. Yes it is popular in the ACT however its coverage doesnt really extend beyond there. As for market share, well that depends on how you measure market share. Most, if not all, agents on allhomes are probably on realestate.com.au and / or domain.com.au.

As for functionality, well allhomes has mapping as does myhome, homehound and many others. The point being that mapping is not unique and what google really brings to the party is a free to list site with potentially access to significant traffic.

Lets see how they really go.

Simon Baker
http://www.propertyportalwatch.com

]]> By: edlang http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30544 edlang Tue, 07 Jul 2009 05:30:41 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30544 Simon, a local comparison would be one between the two sites listed by you, and allhomes. <a href="http://www.allhomes.com.au/ah/ah0036?i=1" rel="nofollow">allhomes</a> latter already has several of the mapping features offered by Google's new service, and many over realestate.com.au / domain.com.au . Have you studied the market share and usage of these three sites in the ACT and surrounding regions? You certainly didn't mention it in your press release. Simon, a local comparison would be one between the two sites listed by you, and allhomes. allhomes latter already has several of the mapping features offered by Google’s new service, and many over realestate.com.au / domain.com.au . Have you studied the market share and usage of these three sites in the ACT and surrounding regions? You certainly didn’t mention it in your press release.

]]> By: sbaker http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30521 sbaker Tue, 07 Jul 2009 04:20:17 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30521 There is alot of noise amongst a small group of real estate agents about the potential of Google to upset the market leaders realestate.com.au and domain.com.au. However, it is unlikely that the entry of Google into the real estate segment will make a big difference. We have a complete analysis of the entry over on Property Portal Watch (www.propertyportalwatch.com) Check out the entry http://www1.propertyportalwatch.com/2009/07/real-estate-added-to-google-maps-%E2%80%93-what-it-means-for-australian-property-portals/ Simon Baker Ex-CEO and Managing Director of the REA Group (realestate.com.au) There is alot of noise amongst a small group of real estate agents about the potential of Google to upset the market leaders realestate.com.au and domain.com.au.

However, it is unlikely that the entry of Google into the real estate segment will make a big difference.

We have a complete analysis of the entry over on Property Portal Watch (www.propertyportalwatch.com)

Check out the entry http://www1.propertyportalwatch.com/2009/07/real-estate-added-to-google-maps-%E2%80%93-what-it-means-for-australian-property-portals/

Simon Baker
Ex-CEO and Managing Director of the REA Group (realestate.com.au)

]]> By: David Sanderson http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30506 David Sanderson Tue, 07 Jul 2009 03:51:37 +0000 http://www.crikey.com.au/2009/07/07/google-barges-in-to-the-real-estate-market/#comment-30506 Could this be useful for home owners who decide to sell the property without an agent? The potential for new technology to remove agents from the transaction, with owners using free services and paying fees for their other requirements, should start to worry real estate agents. Could this be useful for home owners who decide to sell the property without an agent?

The potential for new technology to remove agents from the transaction, with owners using free services and paying fees for their other requirements, should start to worry real estate agents.

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