Zillow, the site where you can find pricing estimates and other info about houses around the United States, aims to disrupt the online lending market with the launch of its Mortgage Marketplace.

That is an interesting monetisation play in the online real estate space. My thinking so far, which echoes that of [...]]]> From Techrunch:

Zillow, the site where you can find pricing estimates and other info about houses around the United States, aims to disrupt the online lending market with the launch of its Mortgage Marketplace.

That is an interesting monetisation play in the online real estate space. My thinking so far, which echoes that of the numerous people I have spoken to in this space, is that the big pot of cash to go after is estate agents commissions. Mortgages feels to me that it is at least as interesting, particularly here in the UK where the position of estate agents is so entrenched.

I read at the weekend that Tesco is going into the real estate market with a low cost service that aims to replace estate agents in the house selling process – turns out that this is not new news (this BBC article is dated May 17) – but if they can get it [...]]]>

I read at the weekend that Tesco is going into the real estate market with a low cost service that aims to replace estate agents in the house selling process – turns out that this is not new news (this BBC article is dated May 17) – but if they can get it to work it is BIG news for the industry.

I posted a rant about the role of agents in the UK generally back in December – my general view is that they are a drag on innovation and I think that is particularly true in real estate.  For that reason alone I welcome this move from Tescos.

On a personal level I’d love to avoid paying estate agents commissions and whilst that has always been possible up to now it has always been a bit risky and time consuming for me.  This development might just change that.

I also like the disruptive nature of it, and the way, if successful, it will change the way houses are sold and marketed in the UK.  In particular it will be good news for property mashups (Nestoria, Extate, OnOneMap and Zoomf) as sites like these stand a good chance of becoming the place that people go to manage their search for a new house.  At the moment the role of estate agents makes that kind of difficult, but the more they are out of the loop the more you can control everything online.

There have been startups trying to get into this space for a while (e.g. PropertyBroker.co.uk), but none have made great headway.  I have put this down to the stranglehold that agents have on the value chain – I guess the hope is that Tesco will have the muscle to break in and take a decent share of the market.

The Tesco service will have a flat fee of £50 and guide you through the sale process – measuring up your house, putting up for sale boards etc. etc.

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I have written before about how this is playing out in UK real estate.

Below are some Friday afternoon musings as I wonder how far this can go?

A good vertical search site will have the ambition to be [...]]]> Vertical search is hot right now, and I get that.  The current paradigm of ‘one size search box fits all’ simply doesn’t deliver enough.

I have written before about how this is playing out in UK real estate.

Below are some Friday afternoon musings as I wonder how far this can go?

A good vertical search site will have the ambition to be the first place people think to go when they are searching in that vertical.  That is the first place, not second.  So people need to remember the brand and the URL and go straight there.  Not find it via Google or anyone else.

There is a miriad of interesting vertical search domains – video search, picture search, local search, job search, news search, real estate search, travel search etc. etc. – I can’t remember different sites for all that lot, which tells me that the good vertical search opportunities are limited to a small number of verticals.  Real estate, jobs and local seem to be the most obvious candidates.  These areas are all really important so the good sites will stick in the mind – but I doubt that same logic could extend to pictures, video, travel etc.

The other interesting question is business model.  In this CNN article Om Malik looks at travel vertical search site Mobissimo.  He argues that their success lies in emulating the Google model – be great at pointing people to the best information, but stop there – don’t get involved in the transaction.  I buy that up to a point – focus is a real asset and staying out of the transaction avoids conflict of interest – the only problem is gives you much less opportunity for revenue which means you have to be that much bigger before your company is valuable.

As I think about this, I realise that the landscape is murky and defining the boundaries of vertical search categories is hard.  For example, Kayak may be the best flight searh engine, but that doesn’t cover the TripAdvisor style content I also need to plan my trip, and nor are they likely to in the future.

The other approach is verticals – of which property is [...]]]> For me vertical search is becoming an increasingly important part of the mix as the web gets bigger and more multimedia.  One search box doesn’t give enough information any more.  Google is carving the problem into horizontal slices – traditional search, image search, news search etc.

The other approach is verticals – of which property is probably the most developed.

We have already had one generation of successful property vertical search sites – of which RightMove has emerged as the biggest and best.

I think the second generation cometh. 

It was interesting yesterday to see that Hugo Burge‘s HOWZAT Media have invested in Zoomf.  I think they are in an exciting position because to my mind RightMove is vulnerable.  There are a couple of key reasons for that:

1. Estate agents are starting to get tired of paying RightMove to be listed.  There was 7% churn last year and that could go higher if someone really comes to challenge RightMove.
2. The second generation players have much better sites - adding Google maps, local information and social features makes for a much better user experience

In addition to Zoomf in the UK Nestoria, OnOneMap and Extate are all interesting.

Just like the first time round this will be a winner takes all game.  Scale of property coverage, consumer brand recognition and favourable organic search rankings all favour the leader.  RightMove (or one of the other first generation players) could adapt and win too.  Overhauling their website and reducing estate agent charges whilst finding other ways to monetise traffic is definitely possible for those guys.  Not many companies have the vision and strength of conviction to change their business model like that though.

They are everywhere in this country, much more so than in the US, for example.

I`ve been feeling it most in advertising through our investment in Buy.At, and estate agents have been figuring prominently in my thoughts about the property sector (of which more below and [...]]]> What is it with us Brits and agencies?

They are everywhere in this country, much more so than in the US, for example.

I`ve been feeling it most in advertising through our investment in Buy.At, and estate agents have been figuring prominently in my thoughts about the property sector (of which more below and in a later post). Then yesterday I had lunch with an old friend who runs a company that sells candidate assessment tools and he was complaining that recruitment agencies are a problem for him in driving innovation in his sector.

Don’t get me wrong, good agencies can offer tremendous value add, and my friends at Blue Barracuda are a great example of that. Unfortunately, however, not all agencies were created equal, and some can be a real drag on innovation.

The power of the web is that it can offer a lot of the services we typically rely on agents for. Two of the main services – finding stuff and pricing it are really done bettter via the web – that way you can be more sure the search is exhaustive and the benchmarking accurate. 

The other thing an agent does for you is help you figure out what you want. In this area the agency model is conflicted. The service here is really consultancy, yet the payment is typically a percentage of what you buy. So incentive for the agent is to get you to make a purchase quickly, without wasting his time. It is this dimension that can get in the way of innovation.

This is a bit of a rant, but I hope our love of agencies doesn’t hold back our internet sector. For example zillow.com in the US property sector has an innovative model of building a permanent database of properties that the owner can simply mark as for sale when they choose (or can show a `make me move` price). This wouldn’t fly today in the UK because estate agents control 99% of the market, but it has a chance in the US where a much greater proportion of homes are sold direct.