Property Portal Watch has turned 5 years old and I was looking through some of the original posts from 2008. One that caught my eye was called titled "Why Rightmove Should Acquire Propertyfinder". In the article I made the argument that Rightmove, even though it was the market leader (and still is), should acquire the Propertyfinder Group to take out the then #2 player (as a group) in the market.
I recommended that this pre-emptive move would make life much more difficult for the other players - especially DMGT. It would also allow Rightmove to operate the #1 and #2 sites thus capturing more eyeballs and making it harder for any other player to get close to them.
Looking back, this recommendation makes even more sense now. Rightmove didn't make a bid to buy Propertyfinder when they could have and Zoopla (a relatively unknown business in those days) swept in and bought up the business for next to nothing as the REA Group was desperate to off load the business for any price. In fact, Zoopla made money on transaction, later selling the small stake held by Properyfinder in Hometrack for more than they bought the complete business.
Zoopla went on to consolidate the market buying up DMGT's assets of Primelocation and Findaproperty to create a highly profitable number player in the UK market that is likely to list sometime in the near future - creating another billion $ property portal. Zoopla is starting to challenge Rightmove and has probably reduced the level of revenue growth Rightmove could have a achieved if it still operated in a more fragmented market or one in which there was a much larger gap between #1 and #2.
Sometimes when there is an opportunity to consolidate the market, you should take it.
Simon Baker is the founder of Property Portal Watch and the former CEO and Managing Director of the REA Group - the former owners of Propertyfinder.com in the UK. Simon will be a speaker at January's Property Portal Watch Conference in which he will share his views on the key trends in the property portal world.