When you take a step back and look at the UK property portal market, the one thing that immediately leaps out is the sheer volume of players in the market. Now given the overall economic conditions, the fact that agents are leaving the market and reducing their marketing spend can only mean that there will be less sites at when we come out of the financial mess than when we went into it.
Now when i was thinking of mergers i really am thinking of mergers amongst the top 4. I dont think any of the top 4 would buy a smaller player as most of these are free sites and this would be a mixing of models. The smaller, free sites could merge however two small sites with minimal revenue doesnt really make much of a difference and the focus would then be on cost reduction.
However the more interesting thoughts would be some sort of consolidation between rightmove.co.uk, propertyfinder.com, findaproperty.com, and primelocation.com. Lets look at some combinations.
findaproperty.com and primelocation.com
Firstly these are both owned by DMGT and there has already been a degree of merger here. However it is hard from them to truly merge as they serve seperate segments of the market and DMGT has been clear that they will continue to be seperate brands and agents will be able to buy packages across both. However, this really doesnt change the market dynamic and is more joint ownership than a true merger.
propertyfinder.com and findaproperty.com
Now this is the perfect merger in the UK market. Both target the same segment and bringing them together would create a stronger player for rightmove.co.uk. It is clear that there is often confusion amongst the agents about who is who as the names are very similar.
The challenge in this merger is the ownership. DMGT (owner of findaproperty.com) and News International (50% owner of propertyfinder.com) are arch enemies and any deal between these two would take a lot of negotation. While it is the best deal, i just cant see it happening - the history is too long.
rightmove.co.uk and primelocation.com
This would be an interesting combination as they tend to target different segments of the market. It would give rightmove.co.uk a stronger offering at the top end while allowing primelocation.com to truly crack the mid to lower end of the market. They both charge similar prices so that wouldnt create much of an issue.
The issue here is that primelocation.com is owned by DMGT and i am not sure that they would give up primelocation.com and want to keep findaproperty.com. (And i cant see them buying rightmove.co.uk)
propertyfinder.com and rightmove.co.uk
This would also be an interesting merger and has some merit. It reality is it a defensive play by rightmove.co.uk. It would ensure that findaproperty.com couldnt merge with propertyfinder.com (see above). However, if the logic above holds and propertyfinder.com and findaproperty.com are unlikely merge, then rightmove.co.uk actually dont have to do anything except sit back and watch the others starve as the market tightens.
One from left field ... rightmove.co.uk and the REA Group
Now this is an interesting merger option and one that would make sense. From a righmove.co.uk perspective it allows them to gain a serious position outside of the UK. For the REA Group, it would allow them to gain a share of the leader in the UK and therefore could turn the loss making propertyfinder.com into a very low cost second site in the UK market (and therefore improve the overall profitability of the group) or even close it down. Both companies are valued about the same and this would certainly create the clear global leader.
Any which way you cut it, something has to give ... it is just a matter of time!