Over the last month Zoopla has clearly signalled to the market its intent to be a major player in the UK property portal market. It has snapped up Thinkproperty and Propertyfinder to clearly position itself in the top three UK portal businesses behind market leader Rightmove and DMGT’s The Digital Property Group.
In the process there have been some winners and some losers. However, it is Rightmove who is likely to gain the most from this move while questions have to be asked if DMGT truly missed a game changing opportunity.
Firstly, it looks like most traditional media companies in the UK have been sidelined in the UK property portal race with the exception being DMGT. GMG has exited the market with the sale Thinkproperty to Zoopla, News International now only has a 50% stake in the 5th placed Globrix, and Trinity Mirror has investments in the minor players Fish4Homes and Smartnewhomes.
The real winner appears to be Rightmove. The market structure in many ways has been maintained. For Zoopla to take on Rightmove, it has to get past DMGT’s sites – Findaproperty and Primelocation. DMGT will therefore have to compete against both Zoopla and Rightmove. Assuming Zoopla maintains an aggressive (read low cost) pricing model, pressure will be placed on DMGT’s ability to rapidly grow revenues.
If DMGT had picked up Propertyfinder, the market would have consolidated around two players rather than three. DMGT would then have been able to price under Rightmove’s pricing umbrella and therefore DMGT would have been able to increase revenues.
It seems that DMGT may have lost a unique opportunity to consolidate the UK market and to position itself as a real challenger for Rightmove’s market leader title.