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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