State of the Portals. Part Two – Domain

Last week we took a look at REA Australia. Today we will take a look at their nearest rival Domain.com.au

Overview: Domain.com.au through Fairfax sat through the early years of this decade and just watched as REA became stronger and stronger, Domain say back and really did nothing about the increasing lead that REA had over them. In fact at one point I actually thought they did not care about the online arena and were happy to just count the dollars from their newspaper classifieds.

However since mid 2006 Domain.com.au has become a serious competitor to REA through robust acquisitions in the online space and traditional media purchases. Yes they have a long way to go and yes they will probably not make it, but I do believe they will close the gap over the next 3 years. This is as long as they show agents that they are in it with them and don’t simply look at growing their business just to charge agents more money. In fact the more listings they acquire, the more visitor numbers they bring in will equal greater 3rd party revenues and possibly stronger newspaper revenues.

Like REA, Domain do play a few tricks with the way they market to Agents, subtleties like being a faster growing portal compared to REA. Well it is easier to grow from a smaller base than one that really does not have too much room for growth. I must say so I do have a bit of a chuckle when I receive their direct email marketing newsletters from time to time. Whilst REA beat on about visitor numbers (and why wouldn’t you) Domain prefer to cut apart the figures and look for sunshine and then market those rays to Agents.

Domain do have the same problem going forward as REA and that is the impending arrival of the large new entrants such as Google, Yahoo and MSN entering with their FREE classifieds websites. Domain are in bed with Google (well sort of) but big decisions are not made locally for this behemoth (Google) and we will see some holding of hands in some areas and competing in others.

The other thing is the Rural Press acquisition. It will be interesting to see what happens to the visitor numbers once all Rural Press Property Guides are branded with Domain and all of their property websites are moved to Domain. This should give them a boost of between 500,000 – 1 million new eyeballs a month, but only time will tell. On this – it is interesting to note that the purchase of www.commercialrealestate.com.au is still its own entity more than a year after its purchase, although I am sure it will be moved into Domain Commercial. So this it seems takes a long time!

Domain have also seen some of their brightest leave in recent months such as Sam Plowman and also some moving to REA. I believe REA also tried to get Sam but he seems to want a little quieter life and good luck to him. If there is a recent lesson in anything it is you must have the right people at the top and MyHome are a perfect example of what happens when you have a bunch of dills running the show.

As for the current website, I have to say that it is way cleaner than REA, it is still a bit of a slow walk to get to listings compared to REA but it is a little more informative on the way – with breakdowns of areas.

Screen space could also be used more effectively but yet again the problem with all of these sites are the fact that they have to accommodate 3rd party advertising and that just makes them look ungainly, dump the banners and go with text based ads that pop out with further information – if the user clicks on it!

If I were to build a real estate portal it would all be about gaining the listings and kneeling before the agents and then finally I would look at 3rd party advertising. This does not downgrade the importance of the site but what it does is get it right for the two main markets and that is the agents and the consumers. 3rd party advertisers do not pay unless both of these groups are well catered for.

Again the company will also struggle in the long term to lift revenues from agents as competition will drive down annual fees significantly into the future. The site tips of REA as far as usability goes and that is only really because I continue to laugh at just how little of REA is about properties for sale and lease.

Threats: REA will still be the threat for the next 3 years. Google, Yahoo and MSN are all looming large with their FREE classifieds offerings and this will have a long term impact on annual agents revenues. MyHome will not challenge in its current form but if they get some people that know what they are doing in charge they may pose a threat.

Future: Domain must get cracking and look at new revenue areas for the site. In 3 to 5 years nearly all real estate portals will be close to free for basic listings and this is where Domain must improve. They need to get into other areas to make money out of agents (web design and development, CRM) and at the same time look at getting more agents on the site. Being cheaper than REA means diddly squat if you don’t get the results and whilst they do well in certain areas they also have large areas of Australia where they are weak.

Rural Press will be a boon in rural areas where Rural Press control a large number of newspapers. I do doubt their technological prowess as you have to type in the *www. to get to the site and simple config (2 minutes) would fix that, so they will not inherit any technological geniuses.

* No sites should ever need to type in www. Say those words to yourself and then your domain name w w w dot…… It takes longer to say the www. than it does to say the domain name.

Private Advertising brings in a small yet significant amount of cash and although Domain have been very careful not to promote this and have played it down as hardly anything, I have from good authority that it is around 40-60k per month (about 250 new subscribers Australia-wide per month) of course this is only a rumour and I doubt anyone would actually let me know the real figures but $500k per annum is not small as far as I am concerned.

The Adore Property site has turned into a dud as far as visitor numbers are concerned and I wonder how much longer agents will support a site that does not bring them results.

All in al Domain need to do a lot of work before they will pose a serious threat, but its acquisitions will give it steady growth. The migration of Rural press will take time but if it is done correctly it will give them a great deal of strength in rural areas and bolster their numbers.

If I were Fairfax I would snap up Portplus as soon as possible as this will give them a good batch (over 1000) agents and a very competitive web design/development arm. They need growth and they need a new business to generate more revenues in different areas. I would also look at building a portal for smaller property businesses that want to advertise their services, like builders, bricklayers, plumbers, landscape gardeners and offer them cost effective advertising in certain suburbs. The more suburbs they want their Google style ads in – the more it costs per annum.

Links:
www.domain.com.au
www.realestate.com.au
www.yahooclassifieds.com
www.liveexpo.com
www.googlebase.com
www.facebook.com
www.myhome.com.au
www.adoreproperty.com
www.commercialrealestate.com.au
www.portplus.com.au

Next Week: MyHome