One only has to understand the way Google works to understand why real estate will play a major role in the future of this company.
Google has made it clear that of a consumer or company wants to access information – they want to have the products and services that you use to get this information. Google traditionally do not charge the companies for providing this information as they make their considerable revenues by charging companies who want to advertise alongside this information.
Google Base started out as a tool more or less because of the popularity of craigslist.com, which today is remarkably popular more so because so many people are just so accustomed to the way it works in America.
Google has now realised just how popular ‘real estate’ has become in classified advertising and a decision has always been imminent in relation to how they will handle this data and make it available to consumers.
Today in America when you search Google for real estate we are seeing some initiatives which will surely be rolled out country by country in the coming months/years.
The idea is that instead of building a new website for real estate searching (which I am betting they do in the future) they are bringing property data results into the actual search results and allowing the consumer to refine their searches by listing type and suburbs and then retrieve those results within the main search engine.
This is an official press release from Google
Uploading Options
This site gives you/developers all the information you need to get ready for this in Australia. It will nearly be exactly the same as the US version, so it is a great primer.
Listing Removal Tools.
If there is one thing that many of the new entrants into the market have had to understand it is the idea of agents having to email/call you to remove listings gets a new entrant offside with agents more quicker than a ‘fake dawn service’. Google have already thought of this and have provided the tools needed to do this.
Google’s Stance
“We believe that buyers just want to see the home that fits them best and that providers shouldn’t have to pay to show it to them. We don’t sell houses, deal with agents’ compensation, or charge for leads. Our business is helping people find the information they’re looking for—when you have it, we send them directly to you.”
Another quote that I like and have been saying for years is “We don’t charge for photos or offer “featured listings.” We believe that buyers just want to see the home that fits them best and that providers shouldn’t have to pay to show it to them. We don’t sell houses, deal with agents’ compensation, or charge for leads. Our business is helping people find the information they’re looking for-when you have it, we send them directly to you.”
I wonder who these comments are directed at?
The Old Way
Traditionally real estate portals have charged both ways. In the first instance they have charged real estate agents to advertise their properties on their real estate portals. In the two major cases with REA and Domain prices have risen by up to 400% in the past 7 years for agents to provide this data.
Once they became popular they started adding different types of listings such as featured properties and premium/platinum listings. This may mean a property gets more visits but does it mean it sells more listings? I doubt it. If a person wants to buy in Bronte they just do not look at the first page.
In the second instance once these portals have the agents property data and they have built a large consumer following they have then charged companies such as banks, insurance companies, property monitors to have their ads appear alongside agents listings.
Google’s entrance into this market will change all of this, prices will drop, but only when portals are forced to do this and this will have a direct correlation to how many agents have their sites or systems set up to take advantage of this. The incumbent portals now own or have relationships with the systems that feed this data and it will be interesting to see how quickly they implement these agents feeds.
More Importantly
The most important things for agents to do today is to make sure they have their websites and systems set up to have all of their property data indexed when this service launches in Australia and New Zealand. I have been a strong advocate of agents controlling their own destiny by making sure that their own websites are ready for this so that when this launches their own websites will directly benefit.
If the same property is listed on yoursite/portals then Google will give the user a choice between which link they would like to follow to view the full property details.
Partnerships
I would be surprised if Google played any favourites and I doubt even the muscle of News Ltd could stop or partner with Google Base. However, if Google enter this space you can be sure that Yahoo and MSN also do the same and you could argue that MyHome is well positioned if this was to occur as it is part owned by Microsoft.
This will place further pressure on REA and Domain, not so much in the short term but I do not think it is a long way off that we will start to see price hike freezes and possibly price drops.
If Google announced a separate search engine for real estate in Australia then this would be a huge blow to the incumbents and they would need to prove their relevance going forward and that means a complete re-think of the their online strategies.
3rd party advertisers such as bank would jump straight into the Google Real Estate search engine and this would also hit the incumbents pockets and I dare say share price.
Finally
Soon I will not need to spray muesli at my screen when Google announced that they are indeed the ‘Google of Real Estate’. This is by no means the end of real estate portals but they will have to evolve to stay relevant. REA and Domain have proven that they can do it by building great online businesses, the next 5 years will truly test them to see whether or not they can stand the test of time and continue to be relevant
The wonderful thing about the Internet is that it is an open platform and unlike traditional media where consumers have little choices in many areas of Australia, the Internet yet again shows that you cannot own a medium you have no control over. Consumers are the judges and they can be a fickle crowd as many have found out recently.
Here are some very interesting links in relation to this article
Intuition Fuel
Future of Real Estate
Marketing
Online Journal and here.
Google
Tools for Real Estate Professionals