Zoopla Confirmed as Potential Propertyfinder Buyer
July 1, 2009 by Simon Baker
Last week it was revealed that the Propertyfinder’s management buy out attempt had failed and that the REA Group and News International had entered into a heads of agreement with a mystery party. This mystery party has now been confirmed as being Zoopla.
Zoopla is a relatively new entrant to the UK online real estate market having initially launched a site around home prices and more recently moving into advertising homes for sale in the UK using the pay per lead model. Earlier this year Zoopla closed out a £3.75m capital raising. Check out our coverage of Zoopla over the last year.
On reflection, this deal makes sense by providing Zoopla with a boost into being a serious competitor in the market and it gives propertyfinder.com and its team a new lease on life.
The deal clearly makes sense for Zoopla. It allows them to short cut years of work and to join the upper eschelons of the UK property portal market.
- They will immediately get a boost in overall traffic by accessing more than 1.2 million people using propertyfinder.com
- They will get access to a strong existing brand
- They will have a direct billing relationship with 5,500 agents around the UK
- They can move from a pay per lead model to the most successful pay to advertise model
- They can have access to a strong, existing revenue stream
- They now have access to a strong team – especially the direct sales team of propertyfinder.com
The deal also makes sense for Propertyfinder by giving it a new lease on life.
- Most people at propertyfinder.com should retain their jobs
- The propertyfinder.com brand will continue to live in the UK
- Propertyfinder will probably have a new, more innovative technology platform to drive the business
- The agents using propertyfinder will have access to a broader range of innovative technologies
The big winner from the deal will be Rightmove while DMGT and its Findaproperty and Primelocation brands will face stiffer competition from a re-energised Zoopla/Propertyfinder. If Propertyfinder had closed, DMGT would have a clear run at Rightmove however the continued presence of Propertyfinder means that they have to split their attention between Rightmove and Propertyfinder.
The challenge now for the team at Zoopla is to have a clear model for the future, to get the existing Propertyfinder team engaged around the future and to make sure that this is done as quickly as possible with minimal impact on visitors and agents who currently use Propertyfinder.
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Zoopla why all the Hoopla ?
Dead duck without acquiring or being acquired.
All the best to the Zoopla team. I suspect Agents may be given a choice – pay to advertise or pay for leads. If so – this will give agents the best of both worlds.
If you had a choice who in their right mind would pay a flat rate when you can pay on performance? I think the best approach for Zoopla will be to change their business model and ditch pay per lead. Let’s not forget that Zoopla started out aggressively promoting for sale by owner.
It is always slightly concerning when an external business thinks it can get more synergy from a business than the exisiting management team – especially a small operation like Zoopla.
I am not sure how they will shed £5M of costs to get the business breakeven without impacting on the current respectible traffic levels – this will then immediately lead to a revenue impact and before they know it – they are on the slippery slope of cost cutting.
DPG and Rightmove are not going to roll over lightly, and I would be concerned that while Zoopla need to make a game changing move – this is a pretty high risk one. PF has had so many attempts at getting it right, and will not be turned around quickly
[...] have a chat about his business. Recently Zoopla has hit the headlines with its announcement that it is acquiring Propertyfinder.com in the UK from the REA Group. Alex talks about his business model and how he sees things panning out in the UK [...]
[...] The company claims this reaffirms its position as the UK’s fastest growing property portal and, that with the imminent integration of thinkproperty.com following its recent acquisition by zoopla.co.uk, these figures look set to grow even further. zoopla.co.uk is also rumoured to be the mystery buyer of REA Group’s UK portal, propertyfinder.com. [...]
[...] rumours of REA Group owned propertyfinder.com’s potential sale to zoopla.co.uk have been confirmed, with the two companies issuing statements today. The REA Group issued a [...]