Slowly but surely Google Real Estate is making inroads into the Australian real estate market with the recent signing of LJ Hooker on top of most of the major players in real estate in Australia. It will take longer for all of the smaller independent agents to come onboard, however it is clear that this is the beginning of a new era and it is time REA and Domain stepped up to the plate and opened themselves up to the Google way of life!
Why? Because not doing so will slowly end their dominance and when the decline occurs it will be so fast that no maneuvering will make a difference.
Some may argue that Google Real Estate has not made a difference as yet, but these people live in complete denial and it will only be a matter of time before visitor numbers begin declining and Google Real Estate begins its upward March.
Remember, Google only has to get comparative data to make a difference. Google also have a far greater capacity to let people know about it than all other real estate portals in the world combined.
Recently a number of videos have been produced that well and truly show how serious Google is about maps and real estate.
Finding a house on Google Real Estate Maps
Here is one to showcase real estate listings throughout Australia
Here is one on how to refine your real estate search on Google Real Estate.
Real Estate API’s
Realestate.com.au and domain.com.au must open their databases up to the general public to create a whole new wave of web and mobile applications.
I have been pushing API’s with these portals for over 2 years and yet we still have nothing. Maybe Realestate.com.au’s big announcement will include an API?
What can an API do?
As an example any website would be able to carry listings through this API, so community websites, industry websites, councils, agents, even business2.com.au would be able to carry listings, sales data etc. Portals do not need agents permission as agents have signed away all rights to the data when they join these sites.
Signing up should be simple and approval rapid and it should be accompanied by rapidly evolving documentation and examples.
Boon for portals
One other thing we will see is innovation across the board, even things we have not even thought of will take us by surprise, but the biggest boon will be for the portals. It will extend their listings and sales data reach and allow that data to be ingrained across 10’s of thousands of websites across Australia and the world.
Versions
There should be two versions of the API, the free version which carries 3rd parties adverts from the portals and is a little limited and then a paid version that carries no advertising and allows the user to do whatever they want with the data!
Flow on
The flow on effect of this will flow across the industries to jobs, cars and classifieds.
Will this happen?
Don’t hold your breath, large organisations are slow at moving on these opportunities, usually waiting until it is too late. We are fast approaching a time where I think realestate.com.au and domain.com.au will start going backwards unless they really innovate with API’s.
One only has to look at the music industry and the movie industry to see how stubborn incumbents completely ruin their own industries by not embracing and innovating.
58 Comments
Adriaan
Couldn’t agree more, excellent article.
We are opening up an API for our South African portal and is the first to do so.
James
Since day one, Google have had a plan and despite the many opinions that were stated when they first launched, in time I think you will find that they will have an effect on current on-line real estate space and players in Australia.
Nick
Google is already getting considerable traffic through real estate searches.
By the way if anyone missed them advertising in Super Food Idea’s Christmas Special you can see it here: http://www.luxuryhomesaustralia.com.au/images/google_ad.png
They are doing actual hard copy advertising.
RE.com.au will never expose a API however.
Simon Cashman
Likewise, a good read with my morning coffee this morning. I couldnt agree more- cheers.
Google ARE going to lead the way soon – What they have in the pipeline with Nexus in the context of R.E. is brilliant. Unfortunatley approval of submission lag time on is still poorly ….Oh and dont make an error in the submission itself – it will take 24hrs and a bit to have it amended live but Im sure that will be fixed soon – its google for god sake!
Augmented Reality teams like Layar.com teaming with google, is a match in heaven. This kinda tech is really exciting and has gotta land here soon (Peter, open up a chat about those guys!!!)
The Domain crew are forward thinkers so Im not too concerned that they wont set the pace but REA? lift your game, shake your paranoia and come down from the ivory tower or you will be left behind.
Ian
This is great, It was not very long ago ( within 3 months ) that I was talking to sales reps of both Domain and RealEstate.com.au and asked them why would I sign up such a expensive long term contract when Google was around the corner. To which both replied:- I can guaranteed that Google can’t offer you a better option and won’t be doing so in the near future! It was the articles on Business2 last year that saved me a lot of headache. Thanks Peter and crew.
Andy Del Vecchio
This article confirms my belief in what the internet is all about in a broad sense.
It’s information and it should be free, the more we can share it, the more we can do with it.
Withholding it may have worked in the past but this is the future and its its upon us now.
There is a paradigm shift occurring regardless of what the traditional powerplayers think.
Viva la Web.
Robert Simeon
If you look at the long term neither REA or Domain have the resources to compete against the likes of Google (nobody can). Google (in Australia) is the most visited website with 10,000,000 visitors (and growing) each month so in time it will become #1 property portal – so what Peter is saying to REA and Domain is 100 per cent correct.
Having said that I read with interest last Saturday in Saturday Domain the Top 10 most searched suburbs in 2009 which identifies huge traffic.
1.Surry Hills 2,537,285 2. Mosman 2,291,860 3. Randwick 2,237,146
4. Darlinghurst 2,159,211 5. Paddington 2,030,416 6. Newtown 1,872,869
7. Chatswood 1,685,820 8. Marrickville 1,682,834 Bondi 1,682,834 and
10. Coogee 1,662,332
So I went to Australian Property Monitors and noted that in 2009 – Houses offered 334 and total number of sales 303. Apartments 500 offered and 484 sold.
Houses and apartments offered – 834 and 2,291,860 visitors = 2,748 visits per property
Houses and apartments sold – 787 and 2,291,860 visitors = 2,912 visits per property. REA would not even be close to this (probably a third) based on the enquiries we receive from them.
So it is no wonder agents/agencies are rushing to roll out smart online platforms to attract the enquiries, build strong databases and gather that all important SEO that Google rewards them for on page rankings. I will predict that Google Adwords will be very popular in 2010 (for the businesses that need it).
Mac
What effect would ‘opening-up’ with API’s have on REA’s revenue, Peter?
Just as they are gouging $25 per month just for the right to upload to them so we can pay them our horrendous fees, I can’t see them letting any more revenue slip. I have been saying for quite some time that the old media is now groups like these portals. There are more options every day now. And, let me tell you, once you get outside the metro area, the big portals generally can’t provide anything more than a good local website – Not that most agents realise that yet!
Charlie
Great article Peter – highly unlikely REA + Domain will deliver APIs, so the die is cast. All great changes happen slowly (and inexorably), so those that don’t notice the change continue as if it’s not happening (and will probably do fine for a while). When they wake up, it will/may be too late, as you say.
Ricky
Agree with Charlie in that change will happen gradually like a slow tide easing its way through the agencies of the suburbs and towns of Australia.
The pace of that tide will quicken as some of the bigger boys start to collaberate and communicate with Google. Just look at what L J Hooker have done with them recently and you start to see where this is heading.
You then start to see agents in their local areas looking over their shoulder and duplicating how guys like Robert Simeon in NSW, Glenn in Qld and even guys like Anthony Toop in SA operate. Robert has been very transparent about how he operates his SEO to benefit his bang for bucks return and little by little others will copy him.
Admittedly Robert is in one of the weakest REA regions but it is Domain’s strongest so it may take 2-3 years but there will be very little either portal can do to compete based on the numbers Robert threw up in his post yesterday.
As stated REA will retain market share and revenue growth based on price rises alone for at least a couple of years because they can. They have already moved to make significant operational cuts by doing away with the vast majority of their on-the-road Business Development people and replacing them with phone and office based telesales bods. Your Account Sales Manager may be calling you in the future from Head Office.
When you start seeing those cost cutting moves you begin to realise that REA are throwing as much dead weight off the boat as they can in the knowledge that the big fast nimble Google boat is ploughing over the horizon. It will get to the point that they have thrown as much off as they can but the fact will remain that the core structure of the boat cannot compete with the vastly superior model. Their goal only two years ago was $500m of revenue by the end of FY 2011 yet they will barely make $200m for FY 2010.
As for domain.com.au I feel sorry for them because they are actually better technically and more clued in to what agents want moving forward. Unfortunately they are managed by the die in a ditch attitude of their Print Masters at the upper end of Fairfax being CEO Brian McCarthy & Chairman Roger “I’m not Ron Walker” Corbett. These guys will kill off domain.com.au with a death by a thousand papercuts.
In commenting on Peter’s embrace, open, innovate or die heading I think both REA and Domain genuinely think they are innovating but are not willing (or able) to embrace or be open so they will slowly but surely wither away.
Sal Espro
Let’s stop telling the portals what to do, guys! Support Google and let them rot in their festering, gouged revenue!
Had enough!
Sal
Ryan O'Grady
If you look at the structure of REA/Domain vs Google you will see they are so far apart.
Google hold as little data as possible. They focus on attracting users to search for snippets of information. The user can then gather further information by clicking through to a 3rd party website. Google encourage users to leave their search engine.
REA on the otherhand hold all the property information. They aim for users to stay on their site as long as possible. What they should be doing is sending snippets of information to 3rd party websites (like Google or B2) where it reaches the eyeballs of 1000s…100,000s of users. When the user decides they would like further information they will click through to the listing on REA.
We’ve seen Google (through Google base) move a bit closer to the REA/Domain model whereby they hold information. However, we’re yet to see REA/Domain move towards the Google model. Having an API would be a huge leep forward in simulating the way Google operate.
Other benefits from sharing data include:
1. Charge 3rd parties for the right to display these listings
2. Enforce a portal logo on the 3rd party website.
3. Integrate REA advertiser’s ads into the listings which are displayed on 3rd party sites.
Information is king and this is something REA/Domain have to their advantage. They just need to work out what to do with it!
Craig
There is an interesting post on http://www1.propertyportalwatch.com/2010/02/copyright-issue-for-realestate-com-au/ that can be related to this. Basically it is suggesting that with the YellowPages decision the info on REA is not really copyrighted to them and sites could basically crawl that info and do what they like with it (like submit it to Google Base maybe!)
Nick
But Ryan who would bother posting REA content, especially #3?
Who would use say the Facebook API if logos and ads were enforced upon anyone who uses it?
Greg Vincent
Nick, to get any serious uptake they would probably have to create a multi-tiered affiliate marketing model or something similar to Google’s Adsense.
Mac
Well there you go!
Where’s the MYHome man that ‘talks’ in here? Is he going to get to work trawling and reposting to increase his dbase?
You’ve got some technology, Peter. Now you can put your theory into practice. What’s your first move? How will you use this ruling to make some $money? Will it service agents/consumers better?
Ian
Hey, just wondering? Does REA or Domain operate in their current format anywhere else in the world- if so what has been their approach / reaction to the Google format in those countries?
Peter Ricci
There are a few countries where they still charge subscriptions for listings. The UK is one of them, however they are becoming the exception rather than the rule.
In the USA for example, nearly all the major sites are free, however each state has one or a number of MLS (Multi Listing Services) systems controlled by ‘boards’ and in most cases these are for profit and agents must list through their local MLS. These are usually outdated enterprises hellbent on maintaining the status quo!
I have no problems with charging agents for these services, but the days of charging them to list and then charging them for sales data and other services are numbered.
Nick
Craig the Yellow Pages ruling only applies to raw facts so you wouldnt be able to scrape everything.
The fact in this context would be that house at 123 blah st is for sale for $123,000.
You could scrape that (if you want to take on REA’s legal team – breaches their terms of use), but anything like photos and the text the agent writes is a creative work which is not in the public domain.
A site like http://www.suburbview.com/ which only states the facts about the house would benefit from the ruling.
Aaron Meehan
Hi peter,
great article, Google is definitely shaking up the industry with this new portal.
What are the implications though down the track of letting another company have a monopoly on real estate searches just like realestate.com has. There is nothing to my knowledge stopping Google in a few years adding a fee to this service.
With a monopoly like theirs both user groups may be hit with a fee too. IE: vendors and buyer’s alike.
I stand to be corrected here but I believe realestae.com.au was a free service to begin with, allbeit with different intentions but there price rises over the last decade are something else thats a hot topic at the moment too.
Craig
Nick, I agree with you about charging, Google is an advertising company. The way I see it is that currently they see how much money agents spend advertising on sites like REA. What they would like to do is get more people using Maps Real Estate and then get the agents to redirect some of that REA advertising expense into advertising on Google AdWords.
Nick
Aaron I think its very safe to say that Google will never charge for Google Maps Real Estate.
Think about how Google operates.
Everything from the users to the content providers on Gmail, Google Maps, Blogger, Youtube, Google Earth, Picasa, Google Docs, Street View, Google Search, etc… is all free.
Google only has one revenue stream and thats ads. Google does not have any other revenue streams*.
Thats how they’ve always done it and it will not change.
I’d also argue that Google Maps Real Estate isnt really a portal. Not in the traditional sense anyway.
No property pages, no contact forms. They use your own website for that.
* They do have some premium services aimed at enterprises which are basically paid versions of their free products.
Its nowhere near their main income stream.
max
you’re kidding right?
You actually think google will never charge agents to list?
Sure they wont in current form but if they hold the cards in a few years there is little doubt they will charge.
public company, profits etc etc.
Trevor
For our websites we use Search Engine Optimization (SEO) to increase natural ranking on Google. If it’s too hard to rank high in natural results we can choose to use Search Engine Marketing (SEM) and pay for Adwords/Pay per Click
So what can you do with real estate listings? They are never going to be online long enough to effectively use SEO. That leaves SEM.
If an average agency was to receive 10,000 property views from REA and another 6,000 from Domain. How much will their online marketing cost increase when they have to pay every time someone clicks on their listing just to look at the details and photos without a guarantee that they will send an enquiry.
You won’t have to use Adwords but lets face it, every agent wants their listing at the top of the results, especially when there are 200+ listings for a given suburb.
Google monetizes everything through pay per click. It will be free to ad listings but my guess is that agents will start battling for prime spots and for their listings to appear on the first page.
If you want the Google traffic you will have to pay.
Greg Vincent
Max, Google don’t need to charge. They could generate millions of millions of dollars worth of revenue if they could simply find more room for their Adwords campaigns to appear. That’s why they developed Google Adsense in the first place,
But now with real estate on Google Maps they allow the same property to have several links to different portals all on the one page. That way each extra link on the page (link to the agents website, homehound, myhome, ljhooker.com, etc) opens up more advertising space down the side of the page relating to that property.
They have also created numerous pages for each property, which in turn means more room for their ads to appear.
While ever people have $50 a day PPC spending allowance & Google can only generate say $19 a day of click-thrus, they will always be looking at what extra money they could have earned & will keep coming up with innovative ways that they can create more room for their advertising to appear.
For instance, by developing Real Estate on Google Maps they have also saved themselves a fortune because don’t have to pay any Adsense commissions out to 3rd party real estate website owners, their ads are sitting on their own platform.
Max, I don’t see agents ever having to pay Google, in fact I see the reverse. As things keep moving forward, there will be a time where Google will be paying a lot of money out to agents via Adsense commission for having Google Ads displayed on their website and/or blogs.
Mac
Aaron, realestate.com.au has always charged – It copied the original property.com.au model (that it bought). And realestateview has always charged even though it has a pizzling market share and the agents own 30%. (You’d reckon they’d wake-up and get rid of it and get back to focussing on training and industry standards, wouldn’t you! As an agent, why would you pay subs to Realestate.com.au, Domain &Realestateview?!)
Craig Adams
Unquestioned most agents just keep paying to the one big player because they are dumb and lazy or they just don’t get the whole SEO Google analytics thing.
Asked another agent what he is doing with Google the other day at an auction and I just got a blank look and a what do you mean? I thought this was good and bad. Good for me as his local competition but bad in terms of his ignorance and head in the sand attitude that I reckon permeates most of the agencies out there.
Looking at REA’s half year results released today shows how much we are being screwed. Record profits and increased revenues all based around two things.
Prices rises and no competition. Same old story. Greg Ellis will tell you its his great new Consumer and Customer model thats driving profits.
Baloney!
Consumer maybe with a new website coming but Customer focus you must be kidding. Who are these faceless Sales Execs and where is the increased service? Have I missed something or is there some other agent in my area getting all the REA love.
Come on Karim and your Google mates get going on these free loading customer averse and lazy individuals. Give us a choice.
Nick
Trevor, Google treats the property listings the same as the search listings.
There is and will never be any way to pay in order to get preference over others.
The order is essentially random. It creates a very level playing field.
max, Google is hardly a normal company.
Ricky
Craig
Agree with you having looked at the results released yesterday.
http://www1.propertyportalwatch.com/2010/02/more-strong-results-from-rea-group/#more-8896
Look at the % increase in revenue that REA have obtained and then look at what you were paying last year and the year before and bang there is your increase. Easy money for a product that hasn’t changed in 5 years. Would you pay an increased price for a product that did the same thing in 2005?
Dominant player calls the shots and all the agents just bend over. So again the only people to blame about the REA dominance are agents and their complacency and the lack of a viable player to oppose REA. Lots of grumpiness but no action.
I went to the Aust Real Estate Institute Awards last year when they launched their new site for agents promising new collaberation between State bodies and the REA guys on the table next door were just gigglling at the ineptitude of the whole industry and its attitide to online. It was embarrassing to see how far behind most agents are in their understanding of digital options. The general feel I got was if you whack the Vendor for a quarter page ad in the local rag, throw it on REA or Domain then you should be able to flog the property within 30 to 40 days, job done.
The people who look at this site get it so I’m preaching to the choir but the majority of agents don’t and until we see what I believe is essentially a generational change within the agencies themselves REA will just keep racking up the revenue and the profits.
On another note the REA share price which is now North of 10 bucks would indicate that the market sees it currently as the unassailable player in a sector that is growing by 20 to 30% each year in the country. Whilst I think the price is overblown it shows what those outside the industry consider to be a complete online r/e monopoly with Domain only essentailly holding ground but making none.
Peter Ricci
Ricky, so how do we get this site out to as many agents as possibly. Currently I think around 10% know about it. How do we get to the other 90%?
Ricky
Peter,
It’s a great question and if ever there was a greater example of the ‘You can lead a horse to water but you can’t make it drink’ analogy then Real Esate Agents are it when it comes to change.
Am I wrong in making the assumption that most Australian Real Estate businesses from the big franchise groups right down to the one shop independents in Townsville, Terrigal or Toorak are still male and over the age of 40 with a large number being over 50. As a result they are generally conservative and will stick to what they know which is a presence (branding) in the local paper and getting the receptionist or youngest sales person (read most IT savvy) to slap up the property on REA or Domain.
That’s what I was talking about with regard to generational change and you can see it at places like Raine and Horne where good old Max is finally letting loose of the old ways and allowing Angus Raine to delve into the online digital options in an effort to keep up with the strategies employed by people like John McGrath and the Ray White clan three years ago.
In terms of getting this site and its information out to the other 90% I’m sure you’ve thought long and hard about it. Two of the Directors in my business are spooked by email alone so getting them to delve into a blog/info site is a stretch which I know sounds hard to believe but I’ll bet a motza that would be the case with 100’s if not 1000’s of agency around the country.
So there is your first challenge which is my view can only occur as the generational ownership and direction of agencies turn over.
I think getting the chance to speak and or contribute to large agent forums is also a great way to get B2 out there. Ironically I was made aware of your site at an agent forum run by REA and Deloitte’s IT GM a couple of years ago in Sydney. The room had over 400 agents in it and Shaun Di Gregorio who was GM for Australia was asked where agents can find out more about online real estate and he referred directly to your site.
I’ve had a bit to do with one of your contributors, Pete Richards at McGraths who may have a few further ideas as he is employed to ensure the McGrath name and brand gets out there.
Nick
I’m doing my bit Peter. 🙂
We provide various services to real estate agents and in our control panel is the Business2 rss feed.
This site is pretty much unique yet I think that 10% figure is generous.
PaulD
Mac Bank did a survey on Australian real estate offices (last year I think). The average age of a principal was 53. Most of those guys (because the vast majority of them are men) haven’t a clue about where real estate is going. They still want to compete in Newspapers and have more pages than their competitor, because that was their standard of success – more pages — imagine that. The other thing is that they have no idea, that they are being screwed to the wall by the newspapers. Wherever there is a vacuum – something rushes in to fill it. I read that somewhere – can’t remember who said it. I mean by that, that somewhere, someone (apart from Google) will be eyeing off the current oportunities in this country, and figuring out that for a much lesser outlay than the current portals, they can offer a better price and make big money. The only thing that will sway the current agency principals is cost. When the vendors finally jack up and say “I’m not paying $5000 for a page advertising” (or whatever it is) and when newspapers simply become too expensive and the current crop of agency principals buy the Winnebago, things will change— rapidly. Some of those things may happen this year, some next – but they will happen.
Charlie
A bit of over generalised real estate agent bashing going on here (popular pasttime along with pollies and used car salesmen). Changes is coming, it’s slow but is happening. Speak to a random 50+ year old real estate Principal about Google and they may well give you a blank stare; yet I see more and more coming through seminars eager to learn, changing their ways – reducing spend on papers, investing more time online in wise areas, finding ways to cut back on REA, use the free sites more, social media and their own site … slowly, it takes time. (Compared to other small and medium business owners I see, real estate agents are well ahead of the curve on new media & technology I reckon.)
Have faith, and yes keep spreading the news about the excellent Biz2 (and others like Peter Fletcher’s Real Estate Marketing Maven)… I remember 10 years ago nothing spent on the web, all the money was heaped into a wheel barrow and dumped at the weekend papers. Today, still too much goes to the paper, but their share is falling (and the papers are screwed, not the agents – they and the public will benefit).
Craig
Shane, I can name one monopoly that didn’t charge. Google. The early search engines, AltaVista, Lycos etc all succumbed and corrupted their product with paid and premium listings. Google succeeded primarily because they didn’t do this, they had the most ‘pure’ and accurate search. And then they worked out how to monetize it with AdWords. I can’t see why they would risk the farm on going back to an old and failed model.
PaulD
Charlie,
Hardly an “over generalised real estate agent bashing” because I happen to be one of them and see it EVERY day. I think I’m entitled to criticise, because I’m right there, not some outsider looking in. Most of the principals I come into contact with have had 1 year’s experience 20 times over. There certainly are changes, most of which they are forced to accept, not willing to accept. They are such an easy target because they don’t go looking for innovation. They just copy and paste when one of their competitors comes up with a good idea. The gap between those who innovate and those who don’t is widening.
Shane Dale
Real Estate is one of the most critical drivers that makes a user gets serious about using the internet – after email, news and social networking – and even porn ( sad but true its a big driver)
A few points for more discussion
– Australia is still probably the highest per capita user of web real estate
– even on a per agent basis I suspect the highest % of listings online compared to anywhere else in the world
– still amazing that agents are coming to grips with internet for real estate, after its been hugely successful for the agents who did use it from as early as 1998
– so as slack as agents in Aus – they still do better than other countries
– google will charge for listings eventually -its great value now as a challenger – but its a business, REA did it in the beginning, and eventually they will too, the only difference will initially be that they can do it more cheaply because digital is cheaper than print, and they have a vast business already – this is a major sideline, which once established will be another near monopoly. Anybody care to name me one monopoly that hasn’t eventually succumbed to charging and using their position? Probably they exist but rare certainly.
I might christen this blog “the chapel of google”, as the willing disciples line up to pray to the new idol, heedless of business fundamentals 😉
In any event, to me its clear that this is the mindset of the industry and its smart to play with the way things move – so observation and smart thinking are required, because perception is reality. The opportunities for smaller players such as myself, are in trying to avoid being squashed and also providing smarter or better services in the mix. Thats a challenge when larger entities can effectively destroy entire web industries overnight, because their unrelated core revenue is so strong. Ah well, at least it wont be boring.
Shane Dale
Craig, thats true – I am just saying its unlikely to always stay that way. Google is a business – they charge for advertising keywords – they dont have a halo. They are smart and fortunate business people.
Once established – these global formats can do as they please. They charge for priority listings and adwords in all other areas – whats the difference between selling a widget and selling a property or more likely an office brand? There must be a way for them to make a buck out of it, but it will undoubtedly be on the same auction system philosophy – so bidding between agents may be viable in the future. I think they are not encountering any formidable opposition, and it will be one of the pillars of their dominance of internet search.
However as I often point out – the cost of REA and domain is still less than the old days of print ads per week. And you get the benefit of adding ALL your listings and also rentals. Its still strange to me how irate some seem to get over REA fees – or is it the sales attitude and perceived arrogance? REA are pushy for sure on price, they will have to milk these last few years of dominance I think before revenues slide. Domain is very very elastic on their vastly differing fees area by area – from free to expensive. Google are now a fact of life, we will all need to work effectively with them as well.
Nick
Shane Dale, one monopoly who hasn’t succumbed to charging for a previously free product?
Hmm thats a tricky one…..let me think about it for a bit…..
Oh right! Google! :p
As Craig said, Google never has, and never will charge for their search. Google Maps Real Estate has ads, and it keeps users on Google’s turf. Thats all they want.
Glenn Batten
Shane,
You said “willing disciples line up to pray to the new idol, heedless of business fundamentals”
Lets summarise what they have done so far.
The world’s most powerful brand
A share price of $526.80 this morning
They started with an investment of just $US100,000, floated with a capitlisation of $US23 billion just 4 years later and now sits at about $US167.51 Billion
Earnings of over $US23 Billion in 2009. Google is not one of the millions of tech companies whose value is based on “potential” income they may make and 99% of their turnover comes from advertising
Despite all this they spend and invest significantly in “good causes”. The company has given away over a Billion US dollars through is philanthropic wing Google.org plus they have created countless innovations and provided them totally for free to the public and even business. They have assisted governments and charity organisations right around the world with free services in areas such as health and natural disasters.
Heedless you say! So what is it that you think we are unaware of? What don’t we understand?
Discuss all you want about what you think they will do in the future but I reckon smiley or not, challenging their business fundamentals seems like a losing discussion to me. They don’t do everything right by any stretch of the imagination, but they have done a lot right and every dollar invested in 1998 is now worth $US1.675 million dollars. If only I had lent them a dollar or two back then 🙂
I reckon they know exactly what they are doing giving so much of it away free like they do. I reckon there is more chance of others following their lead over coming years than the other way around.
Nick
Glenn a example you didnt mention: Google Maps.
I’ve seen a glimpse of the pricing for the data required to do that and its staggering how much it costs them. Add in street view which cant be cheap and then they give it all away for free. Small ad on maps.google.com.au, but its 100% no catches to use on your own site.
Shane you use Google Maps yourself on My Home.
Have you looked in to how many millions you’d need to spend to replace it if Google disappeared? Do you think Google will start charging for it as well?
Ricky
Charlie,
I’m with PaulD in saying the description of the typical agent is what we we work with and against EVERY day. I get to scoot around QLD, NSW and a bit of Vic and the predominant reliance and fixation on getting your brand on more pages than the opposition proliferates in suburbs with big agencies like Surfers Paradise, Double Bay and Hawthorn.
I’ll never forget the excitement at a particular franchise breakfast I attended when it was announced that they had knocked off Ray White for pages in the Gold Coast Bulletin. I could only shake my head at the lack of awareness of digital media from a room full of Principals and long term senior agents.
I genuinely believe a lot of people in our industry ARE complacent and justifiably comparable to car salesmen and pollies. The Australian public many of them intelligent people get screwed into paying thousands of dollars for a print media campaign that merely brands the agent.
It baffles me that most people just bend over and pay it no questions asked with regard to return on investment or measurement of enquiry.
Shane Dale
Ok guys, dont get me wrong I use gmail, gcalendar and alot besides, and broadly support Google – (technically their maps are not free for volume use ) esp as they are far better than Microsoft – and I do think they will behave better – and their model is different than others. I am not google bashing, just saying why is everyone so sure they will never charge at all? I think its feasible they will charge for listings eventually – albeit at a far lesser rate than REA – and its a fair idea – due to their ubiquitous nature. Or they may not. I just dont accept they will never charge because they are nice guys. I think most can agree on that being reasonable.
Having said that – my point is to say that google isnt a charity and will seek to make money where it can – in my opinion its a newer evolved version of yellow pages – and I recall reading once that the yellow pages was the single biggest ad spend in the country as a medium – not sure of the stats, but google must vastly surpass that. They can afford to do alot for free. In many ways there wasnt an option for them to charge where others already existed – free was their challenger play into an existing market – and it paid off, despite not having a clear plan, they learned on the run what to do. I applaud that style, and they continue with it today, probing and testing new ideas.
As a side note – Google did in fact destroy a product i owned – mapIQ – which I bought from their administrator and revived – effectively it was google maps for Australia, but once google bought in – bye bye multi maps, MapIQ and many others must struggle. A the time it was comparable to the early google maps, but now outclassed. Thats life. I could never quite work out a cashflow positive way to grow that as a business anyhow. Its a great support for an information platform however – google have been very smart to implement it this way.
Charlie
Shane – yeah – we developed 4 generations of mapping ourselves, but then blown away by Google Maps – which is basically free, and now universal.
Ricky/PaulD – it’ll take time, but change is a-coming; and those agents – they are changing too, don’t write them all off! Keep up the good work, setting the right examples, pumping out the good stuff on how to use the free media, and keeping the big media boys on their toes. It’s frustrating how much is still spent on old/tired media, but it’s less and less with each passing day..
Shane Dale
Glenn just a clarification – by heedless of business fundamentals – I actually meant that everyone who thinks Google will always guarantee to be free are ignoring the fundamentals of google running a business – they need to make money, and it costs money to run all of these new ventures. There will always be a fundamental temptation to google to get some return on all these ventures. Especially if they feel like they are a viable monopoly. Typically new management usually does this but I think the google boys will be there for a very long time – like Steve Jobs and not like Jerry Yang.
But on reflection its probably true to say there is a strong case for google to keep the free aspect of their core traffic drivers – as they get revenue aplenty from the ad serving side. I hope it stays that way – they have generally behaved very well. Its a fun discussion either way. People like Charlie and I need to think fast and freely to ensure we stay alive in this fast changing world. Suggestions appreciated!
Wayno
Hi Guys
Just had a visit from my REA rep, I told them i was not happy with the increase in rates and he said you guessed it ” if you want the best you have to pay fotr it “. I said ” you do not pay us 1 cent for our listings ” and he said ” it was his site that sold our properties “. The discussion got onto Google and he said ” we will not give them our data “, I replied ” it is our data not yours ” and got complete silence because he knew if we dont give them our listings they have no site. When Google is the main player i will be happy that i became part of it way back when.
PaulD
Wayno, One thing that REA fail to realise, as you indicated, THEY need US more than we need them.
Andrew
I dont like the google real estate method of map searching. It seems slow and messy.
Realestate have already got most of the viewers. A challenger like Google will have to somehow get them to change what they already like and use very often.
Real estate and domain are already in the favourtites of millions of Australians.
Why would they change? It not like they have to pay anything!
Nick
Shane Dale, Google is the worlds biggest adverting company. Thats their revenue.
There is no precedent for them charging for products that were once free, while there are tons of examples where they have free products with advertising.
Why would a advertising company want to get a few hundred dollars from a few real estate agents?
I think they are much happier making Domain and RE.com.au pay them for ads.
I know I would be. The irony is brilliant.
Andrew I dont think its for everyone, but for some its perfect.
If they have a area that they prefer, then they can tinker with stuff like price and see where possible houses are.
If a buyer isnt as picky about location then its not as good.
Andrew
“If they have a area that they prefer, then they can tinker with stuff like price and see where possible houses are.”
True-but that is the only advantage and all that rea and domain has to do is provide that as well for those that understand it is availble and and are willing take the opportunity to change their old habits.
regards.
Glenn Batten
Andrew,
Its not their only advantage by a long shot. Only Google can integrate their property listings into the Google Search Engine. REA and Domain would both love this connection.
Google do not fiddle with their search engine without serious testing and tweaking and there is only ever little changes at time. Integrating the Google property listings was not released originally but it was rolled out afterwards. Initially its integration was very limited but slowly it’s been getting better and better. As this increases the traffic to their real estate listings will increase at the direct expense of REA and Domain.
As per Simon Baker, 30% of the REA daily traffic comes from the Google search engine.
And if 30% of their daily traffic comes from just one search engine when you factor in the other search engines, the traffic generated by agents websites and their own emarketing I doubt it’s the darling of the favourites list you think it is. I reckon its sheer hard SEO and eMarketing work that keeps REA where it is. If you took that traffic out of REA and they had to rely on repeat traffic generated from users favourites list their No.1 ranking would be in trouble.
Glenn Batten
Shane
“Glenn just a clarification
Ian
Just a technical question for someone, as i understand it – with the normal REA and Domain as a new property is loaded the listings goes down the page until they become useless past page 5 or so. If i search through google i still get to see it on the map first up with all the other listings in that area. Is this right ?
Ian
I understand that there is concern that google might look at charging agents for the information but as others have said above google make money from advertising and adwords. When i first investigated the cost of key words for our region they were all around the 5 cent mark 6 months ago. Now the cheapest is 9 cents, so that’s a 80% increase. Agents will have to pay anyway, just in a different way.
Nick
Ian, Google Maps Real Estate does not show the properties in chronological order which (IMHO) is a huge improvement.
Its basically random, with a sprinkling of relevancy algorithms.
And Adwords is completely optional and isnt related to Google Maps Real Estate at all.
Btw dont go in to some other industries. It can go above $5 per click. 9c is extremely low with 50-80c or so being average. 🙂
Andy
We recently developed an API for connection to google real estate which makes integration seamless from an existing database. It took a bit of work and the google integration guide was not much use.
Just wondering if its something that we may be able to offer to others?
Anyone have any thoughts?
Andy
Mac
Andy,
What do you mean? Lots of people internationally are just posting via Google-base. What have you done?
(Do you currently do much work in the real estate industry? What is your background? Do you have a link we can view?)
Nick
I dont get it either. Google Base is very simple to implement and the docs and examples are pretty clear.