Back in 2018 I translated an industry report which claimed that 36% of the classifieds industry was worried about potential competition from Facebook and 21% was worried about Google. The looming dagger of the internet giants remains perhaps the biggest question in the industry. Just ask those in the flight comparison industry, the job portals or any website that ever wanted to make money by publishing lyrics what kind of threat Google is.
Google hasn’t quite lumbered into the property industry just yet, but it has flirted with the idea. Facebook, on the other hand, has definitely had its foot in the water for some time but has been shy about taking the plunge. What is it keeping these internet titans from taking the dinners of the property portals the way they’ve done in other sectors?
- Lawsuits. The EU has never been a big fan of Google and there is even a Wikipedia page here to prove it. Late last year we got news that the EU was also taking Facebook to court over alleged unfair advantages it held over other classifieds on its marketplace platform. Given that, to date, Google has been slapped with $8 billion dollars worth of fines by the EU, trepidation around muscling in on EU companies is probably among the primary reasons that Facebook, Google et al have not made a big play.
- User experience. Have you ever actually taken a look at the property listings on Facebook Marketplace? The experience is surprisingly poor despite content provided by some major portals such as OnTheMarket. Doing a basic search for properties for sale in Manchester I saw houses listed for £1, dodgy photos and mapping issues aplenty. These are all issues commonly associated with poorer quality multi-vertical classifieds sites. These tech giants obviously do have the resources to go after the real estate dollar, but creating a specialist platform to do so requires more work than they’ve put in so far.
- Multi-Country portals seldom succeed and multi-vertical marketplaces don’t do well in the sales market. With the notable exception of idealista, which operates successfully in 3 European markets, multi-country portal brands in mature markets are a rarity. As for multi-vertical sites such as Craigslist or Gumtree, they aren’t big names in terms of property sales in mature markets either. It seems that local market knowledge and familiarity are big factors when it comes to real estate and consumers don’t want to sell their house on the same site they sell their barbecue. A site like Facebook Marketplace is up against it here.
- Google hasn’t invested in real estate for a while. Back in 2015 the big news was that Google’s venture branch had invested in Indian portal company CommonFloor. Despite the investment, CommonFloor remains in the chasing pack behind 99acres and MagicBricks in India and the only other real estate company featured on the portfolio page of CaptialG’s website (Google’s venture fund) is Ten-X which was sold off to CoStar this week. Perhaps both of these facts show that Google has gone cold on the idea of cracking the real estate market.
- The sky will fall on our heads tomorrow. The coming of the internet giants with their monstrous budgets, universal user familiarity and their ability to change the game to their will has been heralded for years. This Inman article from 2015 seems very sure that the invasion is just around the corner and the comments below the line are already welcoming the conquerors of the Real Estate market. Scaremongering gets clicks.
- They’ll target adjacent industries first. This is perhaps a more pragmatic view. Real Estate is a tough nut to crack and end-users are not ready to buy and sell property on unfamiliar platforms just yet. By getting into businesses around the property market such as mortgages, property maintenance and lead generation for agents the big internet companies can forge partnerships and breed user familiarity until such a time as conditions make a big play more attractive.