And They’re Off… It’s Search versus Community
by Gearhart*
We’ve known it was coming for a while… Zillow just announced their inaugural broker feed partner, bringing 80,000 listings from ERA Real Estate (a Realogy brand) into their database. More on the deal from Zillow Blog.
John Cook nailed it (see Zillow and ERA partner on listings) when he said that this announcement brings Zillow squarely in line with Trulia’s model (see Teething Problems as Zillow Bears its Fangs). But, for now, Trulia has the head start in terms of broker relationships while Zillow, arguably, has a bit of an advantage when it comes to the community features on its site.
So the horse race is definitely on. Now that the two will essentially offer similar datasets, the only question is whose approach is going to win out in the end. Trulia’s search tools or Zillow’s community?
Anyone willing to place a bet?
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20 Comment(s)
1 Trackback(s)
- From Trulia Helps Agents Put their Stamp on their Listings | Future of Real Estate Marketing | Nov 8, 2007
Galen | Oct 24, 2007 | Reply
Do we get odds? Perhaps 80,000,000 : 25,000,000?
Joel Burslem | Oct 24, 2007 | Reply
@Galen – dude, you kill me.
andrew | Oct 24, 2007 | Reply
Z is more known than Tru. Personally, I do not think either platform has a good community feature set. The real winner will be the site that can over take Realtor.com search position for keywords and this will not happen unless more sites link to Z with anchor text like “real estate” and “home search”
I think Search is more powerful than Community when looking at listings.
Ron | Oct 24, 2007 | Reply
Zillow’s departure from its current advertising business model to this new click-through advertising business model is the real story to me. I continue to believe that they do not have a clear cut direction and are taking stabs in the dark at this point. With 150 employees the numbers are not ever going to work out on a true advertising play; I don’t care if it is EZ ads, Trulia’s click-through model or anything else. If Move can not make Realtor.com profitable with its huge market share, how do any of these new guys plan on becoming profitable with just a sliver of the pie?
So i ask myself; how did they raise an additional 30 million with out a clear cut direction? Speculation says that they have some master plan up their sleeve. I do not buy that; if they have had a new angle, then it would already be in play. Part of me keeps thinking that smart people would not throw another 30 million down a hole, if they did not know what they were doing. Then I do the numbers again and they just don’t add up. I do not see how their current business model can support over 50 employees at best.
If these guys want to turn into portals, then they are taking on way bigger fish than Realtor.com.
08 will be interesting for these guys
mr search engine | Oct 24, 2007 | Reply
I agree. The problem with most of these RE sites is that they get too much VC, over hire and then talk about how great they are and they never turn a profit. I am part of a start-up that is doing just that, starting up, we are not VC backed but yet we plan to grow at a very rapid pace due to our unique offerings. We will be launched soon. http://www.BeatYouthere.com
David G from Zillow.com | Oct 24, 2007 | Reply
Ron –
There’s no new business model here. We sell ads and it’s working rather nicely. In case it wasn’t clear, brokers like ERA will feed listings to Zillow and they will appear on the site at no charge to the broker. Adding (more) listings to a Real Estate website is obvious – it’s hardly a “stab in the dark.”
Ron | Oct 24, 2007 | Reply
I will agree with you that “stab in the dark” is much too harsh. The click-thru to other websites does seem like a change in direction. I want to see Z make it big; just do not think that ad sales can make that happen. I think for any of these big RE 2.0 website to make it; they will have to some how get a piece of the transaction. There are just no online real estate success stories to point to based on ad sales.
From the outside, I do not see how they could have raised 80 million on an ad sales model. Which would make me think there is something else in the works; but then I wonder if there is a better mouse trap, when will we see it?
08 will be interesting
Z Insider | Oct 24, 2007 | Reply
Trulia vs Zillow. That could be an interesting race. @Andrew – Realtor.com is the real prize. Rumor has it that either T or Z has approached NAR about powering Realtor.com for NAR and taking that business away from Move.com. What would Move.com be if it didn’t have Realtor.com? Now that would be really interesting.
retrove.com | Oct 24, 2007 | Reply
Both T & Z have excellent opportunities but I would have to lean towards Z. The reason to me is simply that Z has more unique content (Zestimates) that attract users vs T’s previously unique map search.
T has search and a very seo friendly site (Yahoo returns almost 6 million T pages in their index) but their content is RE broker provided listings that are repackaged. They also have beautiful tools / maps but most of the data used to generate these I would guess comes from the listing data, again provided by the RE brokers. So T must befriend the brokers while Z is not as broker dependant. I suspect that over time the large brokers will understand how T generates the organic traffic (via seo friendly site) that is sold back to them and maybe hire in-house seo’s to redo their sites and generate the traffic themselves and eliminate ppc / advertising costs to trulia or others. (Weichert is a good example of trying to do this). Worst case, they may also pull back the listing feeds. No inventory / content -> no traffic = big problems for T.
Remember, the issue of selling interested home buyers to RE brokers using the brokers own listings has always been an issue with realtor.com Since Z can generate traffic on it’s own without the brokers I think they are in a better position. If Z stays it’s course and offers the brokerages to post inventory for free, they will probably pick up much more of the available inventory and continue to attract even more user eyeballs and ad $. Z now has Vanessa Fox one of Googles x-main stars (oversaw G webmaster tools) who really understands how to make a site search engine friendly with the big G, so she can point them in the right direction much like Jamie from Yahoo did for T.
Remember – consumers want to find / view all the available real estate listings.
Neither of the T or Z really provides consumers the “complete” picture of available listing inventory. The NAR reported something like 4.4 million active existing listings and there is maybe a million new homes and who knows how many more active FSBO’s and coming foreclosures. The reality is that there is easily 6 million active listings. Therefore T’s million or so listings don’t represent even 20% of inventory and Z’s current 300K does not even represent half a percent of all active listings. This is not good for consumers who are basing a buying decision solely on advertised inventory seen on these sites. I don’t think Goldman Sachs or Scwhab would be successful if they only offered 20% of all the available stocks available for trading? I wish them both continued success because both have raised the bar of real estate but I think there is still plenty of room for growth and improvement.
Sol @ Forsalebyweb | Oct 24, 2007 | Reply
Ron, I’d have to agree with you that if a company truly has a hidden master plan it would not continue to risk ownership. For each new round of financing ownership is sold. Take Z’s latest Make Me Move model as an example. They filed for trademark on October 13, 2006 and the patent and trademark office has only recently accepted for publication on May 22, 2007. It appears they are making things up as they go.
Retrove, I totally agree with you. Consumers want to find / view all the available real estate listings. Without it, the model becomes like a fsbo site. Schwab and etrade didn’t revolutionize the industry by inventing another NASDAQ or NYSE. They figured out how to use the current system. They learned how to grab a piece of the pie.
My personal experience. When Z came out with its instant home valuation tool I told a group of agents that HV will be going out of business. I was most excited about Z’s initial product. When eppraisal.com, housefront, realestateabc, cyberhomes, and others came out with similar tools, I began to lose interest in Z.
I’ve been following Z since the initial launch when we had to take turns to access the site. Since then I’ve gone back maybe five times.
Summary: Z, T, and similar tools are extremely agent centric. I’m not quite certain of their consumer benefits. What are their objectives for the consumers?
The rate of adoption for new tools and resources is such that by the time they become popular the industry will have learned to replicate.
It’s a lot easier to become an airline consolidator for a handful of airlines than it is to become a consolidator for millions of agents.
08 will definately be interesting — at least entertaining.
andrew | Oct 24, 2007 | Reply
@ Z , nar will never corporate with Z since they have fsbo ads. Google couldn’t get the deal done because G refused to not allow fsbo’s. If Tru wants to work with nar than they will not be able to do anything related to buy I owner. Things are going down at Realtor. I have many friends over there and many are now leaving. Big mess.
Todd Carpenter | Oct 25, 2007 | Reply
I for one hope Zillow or Trulia finds a way to supplant, or at least strongly compete with realtor.com, not ally with it.
Victor Lund | Oct 25, 2007 | Reply
The answer is probably both, and more…. for now.
Fundamentally I still do not understand why brokers or MLSs are not launching more feature rich websites. They do not have the business problems of data access facing Zillow or Trulia – and regionally, they spend more money on technology and advertising than any partner site.
In states that allow the display of tax data, MLSs (who have far more share of voice and traffic locally to their public websites than either Zillow or Trulia) could essentially crush both businesses – relegating partner sites to duke it out in markets where brokers or MLSs are not doing a good job on thier public websites.
Big brokers already have far more traffic to thier websites in their local markets than either Trulia or Zillow (ie CAMOVES.com)
The same is true of MLSs with public facing websites. Bob Hale of HAR.com in Houston publishes his web stats that illustrate this point. I suspect this is true of most MLSs operating public websites, ie greathomes.org in the North Bay of California, etc. WAV Group will be publishing a consumer survey fielded to HAR.com which will be available at the National Association of REALTORS conference next month. There is plenty of data in the study to define the consumer perspective on which web sites they use and why…..interesting stuff.
I like your post reference to a “Race.” Right now there only seem to be a small number of horses at the gate, but lots of businesses training thoroughbreds
retrove.com | Oct 25, 2007 | Reply
@ Victor – excellent point but the issue is that consumers have a hard time finding all of these different sites. Also from a consumer point of view none of MLS’s provide the complete picture of available inventory. You have issues of out of area agents who don’t reciprocate listings to the local MLS. In So Cal alone there is over 10 different MLS, with some that overlap. Then there is still the FSBO inventory. This is important since the NAR states that it accounts for over 12% of all successfull sales – how many are active before giving up and going to an agent? I’m sure its well over 30% of all listings.
All of these sites must be designed with the consumer in mind first and foremost not for the personal agenda of the NAR or local MLS as Sol noted. I think G’s & Z position is correct in allowing FSBO’s to be posted as they are looking at the consumer interest first.
Hawaii Life | Oct 25, 2007 | Reply
I think community is going to win out in the long run. With Google Base filling up (they just got all property listings in Hawaii), It’s going to be important for sites to distinguish themselves with more than just listings.
Joseph Ferrara.sellsius | Oct 25, 2007 | Reply
Having found the way to get every home (just ask for it from the public record), I would say Zillow had the best potential to be the ‘go to’ real estate destination site but they lack even a decent search functionality, quality home information (you can’t trust a tax assessor’s data– that’s what you get for not having real estate industry people onboard) and they have the zestimate albatross. Getting another VC handout tells me they’re not growing fast enuf to fund themselves. My guess is Trulia will outlperform Zillow simply by licensing its search capabilities– REBNY in NYC just paid them gazillions. What good is having all the listings if you can;t find the one you’re looking for. That’s why realtor.com is losing the war it should have won a long time ago. It’s search is as fuzzy as my brain was after Beer with Bloggers.
UI Geek | Oct 26, 2007 | Reply
Why isn’t Realtor.com and the new Move.com team part of this conversation? There’s so much fixation with Z and T. But frankly, the only one making any money in this space is Move, to the tune of $300million a year. They’re canning all their losers in SoCal and building the company from scratch again up in Silicon Valley. If they can rework some of their NAR limitations and be more consumer Web 2.0 friendly, then there’s no way Z or T or some other venture-back start-up is going to be able to outlast them. I think the one to watch is Move – they might start acquiring some of these start-ups just to put them out of business. They have a bunch of eBay folks there now and those people know how to beat down your competition.
Sol@forsalebyweb.com | Oct 26, 2007 | Reply
UI Geek, there’s a difference. I think Z and similar models started out
as a means to disrupt the status quo. Realtor.com and move.com are in the business of continuing the status quo. Continued growth/profit for the Move brand will be a challenge when constraint by NAR.
Most fascinating is the fact that many of the distruptive models are now seeking revenue from people that don’t want to be disrupted/traditional players.
I mistakenly believed that Z wanted to help save people money. Now they are looking to create an experience. Their business model has changed. I have a 1% chance of being correct but I think Z has lost its focus. I’d love to support Realtor.com if only the searching were made
easier.
Ken Horst | Oct 28, 2007 | Reply
I think T & Z are nothing more than a bunch of Cash & Flash and all their running around is missing the point. Every major market has dozens of very successful agents and broker who are optimizing theirs local sites as we speak and you can bet that every one of them displays the MLS listings in their area. Fact of the matter is that Internet home shoppers are interested in one thing, local inventory and the bottom line is that if I as a home shopper land on a well optimized web site that displays the thousands of local MLS listings, do I really care that it’s not exactly a complete list?
According to the NAR, most internet home buyers start their search 6 months before they buy, when they land on a local site in a major metro area that has over 28,000 listings, they are overwhelmed and will gladly set a “search saver” alert to help them sort through the chaos over the next few months.
If it weren’t for VC money, I’m not sure how T or Z would be doing and my bet is on the local talent to do a better job of SEO, make their sites more social and give home shoppers exactly what they want, local mls listings using map based search.
retrove.com | Oct 29, 2007 | Reply
“do I really care that it’s not exactly a complete list?”
Here is an example as to why complete inventory is important. Buyer purchases a home, then finds out a house on the street is a foreclosure listed at $25K less. Or a FSBO that was priced less. Maybe a new home developement in the area that was priced the same but offering $30 k in upgrades. When those sell, he / she would automatically lose on their “investment” as the first two examples become the new comps. At a minimum that knowledge helps consumers in negotiation.
The inventory is the single most important thing about a site as it not only tells you what is available but it’s one of the best indicators of home values in a decreasing market.
Also, in large metro markets as you have indicated there maybe multiple MLS’s some of which don’t reciporcate listings (i.e. in LA, CA there is over 10 MLS). So a consumer hunting for his dream home may miss his/her opportunity on their dream house because the local agents site did not provide a means to view the non-reciprocated listings.
Lastly, most sites don’t feature FSBO listings which account for 20-30% of the total active listings. So on you example of 28K homes for sale there is an extra 5600 listings that a consumer would not see at all.
Personally, I think it’s much more important to consumers than you think. To bring it closer to home, do you think visitors would like to use your site to try and find an agent the have heard of, only to find incomplete list?