Yesterday’s Financial Times reported that Google intends to launch an online property portal in the UK, where estate agents will be able to advertise their properties for free. “Experts say this could pose a serious threat to existing property websites and local newspapers”, according to the FT.
What this says about the future of search
The interesting thing about the announcement is not what it says about the future of the selling and renting property in the UK. It’s about the importance of vertical search relative to the generalised search market Google already dominates. By providing a specialised solution for people searching for property, Google is acknowledging that a vertical-specific search approach has advantages over a generalised product, and that ultimately there may be much more money in specific verticals than in general search. (Just think about the potential affiliate fees a property seller might be willing to pay to sell a half-million pound property.) We will explore the growing value in vertical search in more detail in a future blog post.
Long term, Google’s move is much more of a threat to estate agents than local newspapers and property sites
As anyone who’s recently tried to buy or rent a property in the UK’s supply-constrained market will testify, the UK’s “big three” property aggregation sites (Rightmove, FindaProperty and Globrix) already have good-enough functionality – in fact they already do all of the things that have excited commentators about Google’s offering, for example showing available properties on a map.
The problem for anyone relying on these sites is not one of functionality, but one of recency: the property market moves quickly, especially in these supply-constrained times, and the stock available on these aggregation sites is rarely up-to-date. Remember that estate agents all have bricks-and-mortar outlets and a steady stream of new clients through the door – and they are also very effective at client retention. The upshot of all this is that they have little incentive to keep their online sites up-to-date with the latest properties. As a result, the properties that are advertised online – and still available – tend to be the runt of the litter. You could say that estate agents use sites like Rightmove in the way that online publishers use remnant ad networks: for the crap inventory which they can’t sell directly.
Towards a self-serve property market
Now, there is no reason to think that estate agents will be any faster uploading properties to Google’s site than to Rightmove. But, there is reason to think Google will do a better job at directing large numbers of interested web surfers to their site – no one is better at directing web traffic than Google.
And the other thing which Google excel at is opening up their platforms to smaller players, offering easy-to-use, competitively-priced self-serve interfaces. And if I want to sell my property, wouldn’t I prefer to do it directly on Google, and pay 0.02% commission, instead of with an estate agent where I pay 2%, so that they can advertise it on Google for free?
