A Dinosaur Stirs – AOL Real Estate Relaunches
AOL Real Estate just did a soft launch of its real estate portal – the site, still in BETA, has been significantly redesigned and now incorporates map-based search using maps from Mapquest, home valuation tools from Cyberhomes (see Cyberhomes Sneaks Into the Big Time) and mortgage data from Bankrate.com.
Listing data is sadly lacking right now and was, in my searches anyway, mostly confined to FSBO, some foreclosures and a few homes from Keller Williams. That’ll likely change once they begin to integrate listing content from Cyberhomes however.
The site design itself is a huge improvement and functionally, once they work out some of these kinks, I think it’ll be a big win for them.
But what this really signals to me is that old media is waking up to real estate online.
This is only the beginning in the evolution at established media properties that will begin to incorporate more of a search tools pioneered by the Real Estate 2.0 crowd. Yahoo! Real Estate was among the first to do this, but I suspect that many of the major media companies (McClatchy, Tribune) and even local newspapers are beginning to eye this strategy too as they see more and more real estate ad dollars start to flee their print publications for the Internet.
What does it mean in the long run for some of the Real Estate 2.0 first-movers like Zillow and Trulia? Well, first off – I’ll concede it somewhat validates their businesses model. That is, trying to sell advertising around real estate data. I’m still not convinced for these sites, advertising alone can sustain the investments they’re making, especially in today’s market (see What the Subprime Mess Means for Real Estate 2.0).
More than what’s happening in the market today however, as real estate search and valuation tools become more and more commodified on media properties, more and more advertising inventory will be available to potential advertisers – so CPM rates are bound to drop. This will put even further downward pressure on their margins. Destinations like Zillow are also going to start to have to compete for ad buys with sites that have much, much greater traffic than them.
The result in this is that, as the old media players begin to wake up and react to this new reality, it’s ultimately going to put a squeeze on Real Estate 2.0’s go-it-alone, destination-based model. AOL can leverage enormous amounts of cross-platform traffic to their site and so too could the newspaper publishers, for that matter, largely because of their significant offline brand presences. Trulia and Zillow, on the other hand, still face mountains to climb in terms of widespread consumer awareness.
Of the two, Trulia is probably better positioned in the long run, as it has already begun leveraging its technology to white-label search tools for other media properties like CNN/Money (see Tipping Point for Trulia?) as well as powering REBNY’s new ResidentialNYC site. Software sales is not nearly as sexy as developing a standalone destination – but ultimately may have more staying power in the long run.
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Joe from VideoHomes | Oct 1, 2007 | Reply
Joel,
In a word: Convergence. Forget the Zillow vs. Yahoo vs. aol donnybrook. The real action down the line will be on the local level. It will be the Scranton Times vs. Scranton’s CBS affiliate. Individual brokers will mix into this as they should but brokers are not media nor do I think they want to be. Brokers are like other professionals who specialize; they are not “jacks of all trades-masters of none”. Good real estate professionals are just that…real estate pro’s.
It is within this local arena that local brokers/agents will seek out local online media professionals like ScrantonVideoHomes.com to help assist them in capitalizing on converging technologies. Yahoo, Zillow and other national guys can help but their fit into the local offline mechanisms like the Scranton Times or WYOU channel 22 will be generic at best, especially when the NBC affiliate in the next market has the same promotional scheme. Where’s the custom fit? Custom means once not 100x’s.
This is why branding is so important. Much more important that SEO when convergence gets real legs. Companies who have the ability to build a brand offline will survive. Today’s Internet brands have to make sense written down or in conversation and without needing a tag along definition for in the offline world there is no “extra room”.
UI Geek | Oct 1, 2007 | Reply
Joel – as a UI designer, I will have to disagree that this AOL redesign is a huge improvement. The old site was much better. The colors are all wrong – too much white background. The tab structure is hard to follow becuase it’s all text with no visual tab markings. And what is that big blue thing at the top – is that really a search box? Come on. And when you map your listings, that has to be the biggest honking map in all of online real estate. Maybe AOL users need glasses or something.
Lastly, its kinda a bad rip-off on Yahoo Real Estate. REally, can AOL do anything original or will they just do everything Yahoo does (eg, Yahoo’s home page). I guess if you can’t beat them, then join them.
I’ll let your expertise reign supreme on listings but I would concur that there don’t seem to be too many on the site now.
Good thing it’s a beta product. Now the question is whether AOL will do anything about it.
Jayson Gibson | Oct 1, 2007 | Reply
Joel,
Thanks for the article and information. I agree that offline media have the ability to “spread the word faster” but don’t think that we can count out the importance of SEO. I think we’re years away from offline advertising mediums switching their focus online. They make most of their money by printing ads and won’t find comparable profits. Zillow and Trulia are inexpensive advertising mediums and if newspapers and magazines were to compete online, and advertisers realized a significant difference, they wouldn’t be able to sell offline services. Many of these companies are going to hold onto their offline presence for as long as possible.
John Schroeder | Oct 2, 2007 | Reply
I would agree with the first comment on the basis of local is obviously where it is at. Though I don’t think that Joel was trying to compare local vs large AOL type companies.
Back to the large companies getting back into Real Estate. I think that it is a good thing for the industry. No one wants one company to have a monopoly on the listings online. And with the big companies like Google, Yahoo, MSN, AOL, and the likes each gathering their share I don’t think that we will have to worry about that.
The trick is to compete where you can on a local level. As well as position yourself as you can with in the big companies sites.
David G from Zillow.com | Oct 2, 2007 | Reply
Joel – surely you understand that you can learn nothing by comparing all of AOL and Y!’ traffic with Zillow or Trulia’s traffic??? Advertisers analyze the portals’ traffic within the category – not across the entire portal.
Joel Burslem | Oct 2, 2007 | Reply
@DavidG – Totally. Unfortunately tools like Quantcast and Compete don’t allow you to break down traffic on a portal’s subdomains, so you’re stuck analyzing TLDs.
My point really though was that the portals (and newspapers) can leverage existing traffic and the network effect and funnel it into their real estate verticals. Standalone destinations like Trulia and Zillow face a much greater challenge building a unique destination. Not a new issue – but relevant, as the thrust of this post was that I think more and more mainstream media outlets like AOL will be pursuing real estate plays very quickly.
Michael Price | Oct 2, 2007 | Reply
Joel, Maybe I missed something but you sound as if AOL is just now jumping into the Real Estate space, they are just realigning their content partnerships and re-launching the site. The beta label for the likes of AOL is kind of silly if you ask me. Consumers see the site for what it is. A. Useful B. Not Useful.
McClatchy and Tribune are a part of Homescape, a division of Classified Ventures, (the other players are Belo,The Washington Post and Gannett) who like AOL have been pursuing the online real estate space for years. Homescape has announced new strategies to partner with Brokers to get listing data, so in a way they will be playing catch up when it comes to the numbers game. Newspaper sites have tried any number of different ways to capitalize on what you refer to as a funnel effect. By and large, it has yet to prove effective in most major markets. Thus the redirected effort on Homescape’s part when it comes to listing content.
As far as AOL is concerned, they see the tremendous consumer success that Zillow has been able to capture and they are redirecting their partnerships to capitalize on it in any way they can. Starting over isn’t easy, even if you’re AOL. Scrapping the real estate section of their portal and rebuilding should tell you what level of success, or lack thereof, that they have had over the years and In my opinion they will have to work about as hard as anyone else to compete with the likes of Trulia and Zillow. The Halo effect just isn’t as strong as you might think. There are still plenty of other partnership opportunities to be had as well.
Jayson,
I am scratching my head at your comment. It went from SEO is important to traditional advertising is here to stay for years to come. So that begs the question…….. huh????
David G from Zillow.com | Oct 2, 2007 | Reply
Joel – so, just because the data you needed wasn’t freely available you published whatever was available? -d-u-d-e-
Consider that the portal traffic “funneled” comes at both an opportunity cost and a development cost to the portal … not unlike the marketing costs that vertical web sites have to bear. So, a vertical site’s challenge is no greater than a portal’s, only different. The portal vs. vertical debate is as old as the web itself and has no clear winner. In the real estate space, my personal bet is on the innovation that comes with a vertical focus.
Joel Burslem | Oct 2, 2007 | Reply
@Michael – I probably should have said ‘renewed’ real estate plays. I think that real estate, at least for the last few years, has been largely an after thought for most of the big media players. Sure there have been attempts by some of them to build out a site full of listings, but it was always difficult to monetize – hence the failed lead gen models.
You’re right – they see the success that Zillow has had and are stirring to life. This is a different idea – real estate data as content. A true media model. This is a business these guys know well.
Couple that with the real estate ad dollars fleeing print for online and they’re moving into action.
I bet we’re going to see some pretty major moves in the next few months as these guys rumble to life.
Joel Burslem | Oct 2, 2007 | Reply
@David – Zillow will no doubt continue to get a piece of the ad dollar pie. It’s just that, as there’s more competition, that piece gets smaller. Especially when everyone start revamping themselves to offer exactly what Zillow offers.
We can agree to disagree on the vertical vs. portal approach – but I’m hedging my bets on who can best reach the offline world, where most people that I talk to on the street, in the bar, have never even heard of Zillow or Trulia. Most of them have heard of AOL or Yahoo! however. I would suspect there are far more of them then there are of us.
IMHO – Compete’s graph is representative of that.
Jason Brown | Oct 3, 2007 | Reply
AOL’s name recognition gives it an audience and chance at success. A relaunch though indicates how poorly the previous model’s results must have been. You know I haven’t visited AOL in years. I think I’ll go do that right now and reminisce…
… OK, 30 seconds was enough. I saw the AOL logo and into my head popped early 1990’s visions of Bust A Move and Buster Douglas. Memory bliss, yet all symbols of the past. Now I’m running to YouTube to find Young MC’s video. This thread has made my morning very nonproductive.
Hawaii Life | Oct 3, 2007 | Reply
I am more in fear of Google Local then I am of this AOL redesign. And as a lot of people mention in the comments. Local is where it’s at. No doubt, the larger players will get their piece of the action, but you cannot compete with local knowledge that the smaller players can provide.
So the question becomes, who is going to be the first to put a bunch of local players together to create a larger network? I hope that our brokerage, Real Connections, inc. is the answer to this. We are in version 4.0 of our software which will release in Beta in 2 weeks. After we do our full launch, the idea is to unify brokerages around the nation to form a site that offers local knowledge.