Sites like Zillow.com get a lot of press and they look great but will they deliver?
London (PRWEB) March 14, 2008
Simon Baker, CEO of News Corporation-owned REA Group, today accuses real estate 2.0 sites as being a 'total fad'. In an interview with UK-based business to business real estate portal, Globaledge.co.uk, he singles out Zillow.com as having a flawed business model, saying he doubts they have the revenues to support a sustained assault on market leader Realtor.com. "Sites like Zillow.com get a lot of press and they look great but will they deliver?" he asks. "I doubt whether they do more than US$3 million a year compared to Realtor.com's US$300 million". Implying that lack of funds will hamper their marketing efforts.
Amanda Hoffman from Zillow.com does not deny Baker's financial comparisons but argues that the business has already established traction with consumers. "In just two years Zillow has become one of the most-visited real estate sites in the US, with nearly 5 million unique visitors per month," she says, claiming that having 88% of traffic from repeat visitors is proof they have a sustainable business model. "Many other US real estate sites, including Realtor.com, have begun to adopt many similar Web 2.0 strategies due to the increasing demand for this by consumers. Failure to meet this demand will only cause consumers to look elsewhere for their needs."
In the interview Baker goes on to criticise other Web 2.0 property portals, notably new start-up Globrix in the UK. He argues that in most mature markets, the land grab is over and that the established portals have an unassailable lead over their rivals. When asked about any advice he'd pass onto fledgling property portals he says: "Outside of Asia, South America and Eastern Europe, my advice would be, keep your money. In fact, if you were given £20 million to start a new real estate portal, the best thing to do would be [not to start the portal at all and] to set up a consultancy to take the money from them."