What’s in Store for Yahoo Real Estate
There have been numerous rumblings over the last week that suggest that Yahoo is planning to lay off hundreds of employees in an attempt to shed some weight and boost its profitability. Now the New York Times is reporting it, suggesting the announcement could come at the end of the month.
So how is this going to affect Yahoo Real Estate?
It’s certainly still one of the most popular real estate destinations online - just behind Realtor.com and MSN Real Estate (according to ComScore, see Real estate Web traffic increasing).
But the portal is a bit of an anomaly in Real Estate 2.0. Rather than build much itself - it has instead focused its strategy on aggregating the best features from other Yahoo assets and around the ‘Net (listings from Pru, valuation from Zillow and eppraisal.com, foreclosures from RealtyTrac, etc. etc.), then wrap them in display advertising and leverage its cross-property traffic to drive pageviews (see A conversation with Michael Yang, General Manager of Yahoo Real Estate).
Their latest release adds content to a new Guides and Advice section, which layers in one more destination for that traffic to go on the site. (Full Disclosure: The new section incorporates content from Inman News, my employer, and I helped negotiate that relationship).
Unfortunately, adding more to the mix just means more of a schizophrenic experience on the site. With so many places to go - I find it, quite honestly, overwhelming and ultimately disappointing.
The sad thing is, Yahoo Real Estate, despite its impressive traffic numbers, has always felt like kind of an afterthought by the company - especially when placed against some of its more developed sections like Yahoo Finance. Which is why the news of impending layoffs must surely be troubling.
Sramana Mitra, writing over on GigaOm today, implores Yahoo to Please Put Up A Fight. He writes:
Yet another segment that is moving online is real estate classifieds. Borell Associates predicts that by 2012, newspaper real estate ad revenue will hit $3.2 billion, while online real estate ad revenue will surpass that at $3.4 billion. In 2007, total ad spending on real estate dropped 3 percent, but online advertising soared 25.8 percent to $2.6 billion due to a shift to online from print. Yahoo doesn’t have much of a presence in online real estate — ZipRealty is a ripe and cheap acquisition target.
Mitra is right on when she said that Yahoo hasn’t nearly captured what it could in real estate advertising - but misses the boat completely when she suggests that the portal should acquire ZipRealty. I doubt Yahoo has any interest at all in running a brokerage. Besides, that wouldn’t give them any slice of the advertising pie anyway.
If Yahoo is serious about acquiring a stake in online real estate (which, I can’t tell if is) - a better target might be a company like Trulia, who already has a business model in place to secure some of those classifieds dollars.
A move like that would require some serious re-jigging of their model but maybe that’s just what they need to do.
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sidestepfan | Jan 22, 2008 | Reply
Move.com is the better candidate for Yahoo, not Trulia. Real revenues, real traffic, ral low valuation, real oppty to clean house and turn it around.
Brian Requarth | Jan 22, 2008 | Reply
I agree that Yahoo Real Estate seems like an after thought. They have kind of blown it. ZipRealty would not fit into their business model. I like what Trulia has done, but I agree with sidestepper, the value wouldn’t match the price tag. On the other hand if they bought Move they could do a lot with it. It seems most realtors out there feel that realtor.com/NAR are just out to get their money. It would be a good opportunity to improve value and would help realtor.com (I believe it is on its way down) keep or grow their market share.
Congrats on getting the content deal with Yahoo. Keep up the great work,
Avid reader from South America
Mark Daugherty | Jan 22, 2008 | Reply
The big real estate portals are a good starting point for those who are in the information gathering stage, but they aren’t going to give me what I need when it comes time to make a decision. Real estate is about location, and the key word is local. The latest mashup is fun to look at, but does it really provide any value?
Chris Dowell | Jan 22, 2008 | Reply
Traffic from Yahoo Real Estate has slowly gone up. A change could send the results back down. Currently, I get 7 viewers from Google for every 3 from Yahoo. Out of every 10 viewers from Yahoo, I get 3 viewers from Yahoo Real Estate. Google is still king on my website for traffic. I would love to see Yahoo traffic increase.
Diego | Jan 22, 2008 | Reply
What’s so attractive about a classifieds business model when your competition (i.e. CraigsList) is free? Didn’t Yahoo! try this already? Agree, that Move seems like a better target if Yahoo! is really serious about the real estate space.
Doesn’t Trulia use RealtyTrac foreclosure listings?
Classifieds0 | Jan 22, 2008 | Reply
Classifieds dollars are going to 0. Who believes those Borrell figures anywhere. How is the online real estate market greater then a few hundred million (no way it’s a billion)? Agree with Diego about free which is why it’s humorous that anyone would propose Trulia as a target. Seems like Yahoo doing more content is to support more display advertising as Joel notes. Probably not a bad strategy if you are Yahoo. Clearly harder to do as a start-up. Maybe they are trying to make it more like a Yahoo Finance.
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Brian Wilson | Jan 23, 2008 | Reply
I do not know this first-hand, but I imagine that Move.com many not be an attractive acquisition since most of its value is tied to its operating agreement with NAR to operate Realtor.com. It is my understanding that NAR and Move.com are each able to terminate this agreement when they want. If this is the case and a portal were to buy a controlling interest in Move.com, I doubt NAR would allow Realtor.com to stay in the equation.
Vinny LaBarbera | Jan 23, 2008 | Reply
I foresee Yahoo Real Estate going to the wayside. Trulia is becoming much too powerful, user friendly, resourceful and community rich. I also like where FrontDoor.com is going as well. I am definitely interested to see what happens with sites like ZipRealty.com as this business is extremely undervalued and I think there is a good handful of real estate sites that could really make some huge jumps in traffic if they can acquire, or work with, ZipRealty.com.
Andrew | Jan 24, 2008 | Reply
Yahoo Real Estate has been a great partner for our company. As a major search engine, Yahoo will need to realize that they are already ahead of Google in terms of real estate classifieds. Google Base hasn’t become mainstream yet.
Jonathan Cardella | Jan 25, 2008 | Reply
I agree with Vinny. While Zip needs a business model overhaul and may not be the right match for Yahoo, it definitely does present a true value buy. The company currently has a market cap of $123 M with net assets of approximately $90M. Do the math and you can see that its dirt cheap. They also have 2,000 employees, so I see room for saving a few bucks with a real overhaul. With $100M in annual revenue, a pro should be able to wring out some value.