Google Real Estate in Europe – What is All the Fuss About? Lessons from Australia
December 4, 2009 by Simon Baker
The news yesterday that Google was “entering” the UK/European market sent the share prices of Rightmove and Seloger into a tailspin. The Seloger share price closed down 5.7% at €23.50 while the Rightmove share price was hammered a whopping 10.3% to 499.9p.
So let’s look at what happened. An article by the Financial Times (Dec 2 titled “Google set to enter UK property market”) seems to have set the cat amongst the pigeons. The article stated that Google is in talks with British estate agents and that “experts” say that an entry by them to the market could pose a serious threat to existing property websites. The article didn’t talk about what Google was going to do and Google didn’t comment. So there is really not much to go on. So the only guide we really have as to what Google may do in the UK and Europe is what they have done in Australia.
Google “entered” the Australian market 6 months ago (July 2009) when they made it possible for agents, brokers, franchise groups, and portal sites to place their listings on Google Maps. When a user does a search on Google Maps (not the main Google search) for real estate, Google plots the houses in its database on the maps and users can then click on the various dots to see if they like the houses and then are driven back to the advertiser’s site.
At that time, there was a similar uproar and many were predicting the death of realestate.com.au and domain.com.au and the REA Group share price dropped nearly 7% from $5.90 to $5.50. However in the 6 months since the announcement by Google, the REA Group share price has increased 53% to $8.44, the traffic to the site has increased from 4.5m UB’s in June 09 to 5.4m UB’s in October and analysts are predicting an additional 20% revenue growth for the REA Group in FY 2010.
In August we wrote about the challenges for Google knocking over the market leaders. Here is the link to the article called “The Challenges for Google Real Estate”. All of these still hold true.
Over the next week, we will be writing a series of articles about the true hurdles that Google has to overcome in any market to knock off the incumbent market leaders. Tune in for these articles.
In New York on the 12th January we will be holding the Property Portal Watch Workshop. At this workshop we will be discussing Google and its potential impact on the property portal market. Join the 60+ other attendees to discuss this and other important topics in the property portal market.
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Last week we wrote about the effectiveness of Google Maps and Nestoria Australia in driving traffic to a mid-sized Australian property portal. The facts showed that both sites were equally effective and drove between 5% and 6% of traffic to the site. At the Property Portal Watch Workshop held in San Francisco last week, the 70 attendees discussed at length the potential impact of Google Maps on property portals around the world. We discussed anecdotally the impact of Google Maps on portals around the world. Read on for some of the findings....
- Google Real Estate One Year On – Some Results
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Google is on a subtle – “little by little, bit by bit” creep into the role of property portal in my opinion and there is a risk to not just the property portals but to real estate companies.
If the portals fall by the wayside as Google aggregates an image based geo-centric search facility with smart algorithms linking attributes to users profiles then the only effective method to provide standout marketing in the post-paper based media world will be Google owned advertising which companies or vendors will have to pay for.
As a demonstration of the insidious creep of Google to this holy grail of a $15bn a year advertising heaven – observe the addition of a video link in the Base data feed (http://img.skitch.com/20091204-n498yer4njuehq4jw211b634r1.jpg) – however only YouTube videos can be viewed (and therefore searched and indexed).
Looking forward to the discussions coming in the next few articles.
It is interesting that Google has decided to add this to its ever growing company and I am sure RightMove will see an improvement in its share price over time, but I do wonder how it will affect the UK property market as RightMove is a household name that is well advertised. I think that it will be interesting for RMs marketing department over the next 6 months. I wonder what the age bracket for buying a house in Australia is to the UK, as currently it is about 35 in the UK (I think) and how many people above this age have a good understanding of the internet. I would have thought that most people would just know google as a search engine.
Have portals in Australia provided feeds to Google?
The two major portals – realestate.com.au and domain.com.au are not feeding to Google and why would they.
For Google to be relevant to users, it needs to have as many listings are realestate.com.au. As REA has 95% of the listings, it would not make sense for REA to make Google’s life easy so Google will have to source the listings directly from agents or from franchise groups.
This will be hard as agents dont often self service and uploading listings is non-trivial.
It is unlikely that they will be as comprehensive as REA.
Thanks
Simon Baker
It might be better to title this entry “early lessons from Australia”
The vast majority of uploaders in Australia are sending listings to Google. This includes the Franchise Groups.
An interesting measure would be to identify how many listings Google has acquired since launch. This % growth would then put things into perspective, particularly when comparing to how many listings (customers) Domain and realestate had within their first year of operation.
I am sure that UK estate agents will enjoy free advertising (until the appearance of the premium service…)
I guess that it will take a few years to pick up and ease the search for the end users but I don’t think that property portals like property finder, find a property and so on will be much affected. Like you mentionned the one who has to fear it is Rightmove because they are the market leader and they have to watch out because all of their competitors are trying to take the lead. It might be Google, might be another portal (like Zoopla?)
Brian
Firstly, comparing the growth in listings of Google within the first 6 months and the growth in listings from REA and Domain in their first 6 months is nonsense. REA and Domain commenced operations in 1996/7 when the internet was just a glint in Al Gores imagination.
There is much more to success than just content. If you look around the net there are many sites with heaps of content. In the UK for example, Nestoria and Globrix claim to have more content than Rightmove yet can not knock off Rightmove, even (in Globrix’s case) the help of Murdoch.
Google has to nail quality of content (spaming is easy with Google – i put my place up there and it isnt even for sale – the Nigerians will have a ball). They will also have to nail the user interface. I am not convinced that putting dots on a map is actually user friendly. Intellectually it looks great but users like to see pictures and see them fast. Trulia in the US started as a map with dots and quickly moved to a list of properties as it realised that this is what the user likes more.
Finally, Google has to work out how to drive leads, not clicks. If i was an agent i would rather a phone number or email address to respond to than a click to my site where i then have to convert that click to a lead.
There is a very very very long way to go for Google to truly impact the property portal industry beyond creating a little buzz.
Simon Baker
Publusher
Property Portal Watch
I was very excited to hear of Google’s recent public announcement, purely from the viewpoint of bringing another dimension to property-related services for both Estate Agents and their paying consumers (whether free, premium, or a blend of the two).
FOR THE CONSUMER: If successful, Google will ultimately employ its technology prowess and strategic experience in delivering what needs to be a compelling service, akin to the ease and satisfaction with which users search online today via their, erm, search engine website. I think it is fool-hardy to assume Google’s foray into the realty markets in AU and the US are both ‘low impact’ and likely to be duplicated in the UK – such a comparison is definitely not apples-for-apples and misses one very important fact which I’ll get to in a moment. Yes, culturally, a computer user is a computer user, no matter where they are on the Internet, so the assumption is that what works in one locale would surely work anywhere else, right? Wrong! There are differences in the approach Google needs to take (and will take) when taking on a new (and foreign) market: Firstly, the UK Estate Agency market and UK regulations are very different to those I have experienced here in Florida during the past 6 years. Some have speculated the UK property market will somehow “morph” itself around the impact Google makes in the UK and thus become like the US realty market – I doubt it, somehow. Politics aside, the UK government does not govern and regulate in quite the same way as the US or AU. Secondly, property experts (and their critics) need to understand the thinking behind Google’s overall business strategy and not just their realty ambitions. Their mission is almost as simple as their google.com website: deliver what the user expects – quickly and efficiently, because Google understands it is just one click away from a user searching elsewhere. For the Consumer, Google could be yet another avenue to pursue when buying or selling a home. And let’s face it, as both a buyer and/or a seller, this is ultimately what users have come to expect from using the web.
FOR THE REALTORS / ESTATE AGENTS: Some blogs have suggested that a key challenge for Google is in managing active abuse of free listings, and purging stale information left behind by lazy, sloppy – and even cheating – Agents. Technology is there to enable and support: getting bogged down in discussions over interface issues like Pins instead of images, speculating that Google’s implementation in AU has (in hindsight) not hurt the top players there, or even panicking about the stale data served up for dead-end listings – this is what brings me to the fact I teased you with earlier: if Google’s technology base was unable to adapt and change in order to keep that ever elusive user at the heart of its thinking, how can it be they are number one with the hugely successful technology-driven service they clearly intend to employ in realty? Would you continue to use a search engine if there’s a high risk your number one page results consistently lead to a dead-end? ! No, of course you wouldn’t – and neither would I. Heck, I don’t even bother to wait for a page to load into my browser if it isn’t there in seconds. Irrespective of what Google’s end product will look like (Portals, Feeds, or both), the real estate market in the UK will be impacted, so it has to ask itself: how can it change, too, and adapt to the surgical approach of search algorithms that put it where it is today? Agents must also wrap their heads around how they can exploit this opportunity as another channel, or tool.
Google has spent its entire life refining and combing the way in which it gives credence (page ranking) to prominent content which is fresh, relevant, and just in time. I don’t feel sorry for anyone who is ignorant enough to risk their online prominence via Google by “working the technology” in order to appear at the top of any list – regardless of who actually serves it up to the end user. Lastly: if Google does adopt a Portal approach that sticks, why wouldn’t they want to create a mini universe of paid search within that realm? I’m happy about what Google is going to do because I know we will have a lot of fresh clients asking us how they can ride this bandwagon as soon as it gets rolling. I and my staff are planning to be busy next year helping our UK prospects to match our consultancy offerings to the needs of the people who need it most – and that may very well include people just like you and me!
[...] Property Portal Watch rightly asked what all the fuss is about and have prepared some statistics from the Australian market. [...]
I agree with Alistair Helm, the likes of UK property portals such as Rightmove ( as well as estate agents ) should be concerned. Portals and agents should now be considering their business models in light of this move and at the very least determining how they should react in the next few years. Really admire David Anthony’s positive attitude to work with it rather than against it.
Rightmove are placed in a relatively weak position when Google infringes into their perceived territory. Google has greater traffic, more money, an unrivalled brand, and sharper technology. Online property portals need to rethink their business models to reflect the fact that Google could become their biggest competitor overnight if it so chooses. That being said, I recall similar talk when Tesco were thinking of entering the UK estate agency business
Rightmove is enjoying top spot in the UK, especially since bringing out their own iphone app which has greatly enhanced the speed at which you can access up to date information on the fly. I wonder if google is spreading itself too thinly into what is a very competitive market place, though competition can only be good for the end user.