News just from Sydney Morning Herald a Fairfax company has publicly announced its first threat against Google Maps new Real Estate update. It seems that there has not be much has been publicly said about Google’s move into the backyard of Domain & RealEstate.com.au until today.
Two of Australia’s largest media companies appear to have made the first threat to pull their business because of Google’s move into the real estate listing market. While it will be a public independent decision, it is likely that with 90% of the market their decision will have a massive impact on Google’s local revenues.
The Australian market for classified advertising is worth around $144,000,000 to Google annually according to the SMH article, accounting for around 15% of Google’s revenues within Australia.
This relationship has shown some signs of strain, with Rupert Murdoch already accusing Google of failing to pay for content shown on its Google News service. To further add insult to injury Google News has begun to sell ads against this aggregated content which has not helped with failing advertising revenues.
Google Maps began the process on 6th July sourcing listings from local real estate aggregators, Homehound & My Home offering real estate agents an opportunity to list their properties free on Google Maps. This listing service generates hundreds of dollars of revenue for Domain & RealEstate.com.au for each property and thousands from real estate offices.
While RealEstate.com.au has not allowed private sellers to list their properties on its website instead choosing to protect its real estate agents. It is likely that RealEstate.com.au will have examine if 45% annual increases will continue to be sustainable. Domain encourages this self service listing service with costs from $250-499 and this will likely be the first market that will prefer to list their home for free on the new Google Maps service.
The CEO of REA Group, Greg Ellis did not initially object to the Google Maps service at least publicly. He did considered the interesting concept of REA paying for Google AdWords to compete against a free Google Map product which was funded by REA Google AdWords revenue.
Analyst Frost & Sullivan forecast that the online real estate market grew at 38% in 2008 and is forecast to grow by a further 23% in 2009. Nielsen advise that the market size is significant with around 500,000 visits to property websites each day. Leading marketing intelligence provider Hitwise advise around 30% of the traffic to these property websites comes from Google, so who is supporting who more?
Former CEO of REA, Mr Baker said Google Australia might be shooting themselves in the foot by this battle as their core business model is selling ads against search queries. It has the potential to move into a paradox if the new Google Map service struggles to attract enough visitors Google may begin to utilise their AdWord system to drive more visitors. The paradox is that the other Real Estate portals will now be competing and bidding against Google for the same traffic.
There has been agents who have been carefully watching the matter and have found that Google is only scraping the Head Offices, MyHome and Homehound websites and none of the independents or franchise websites that have individual websites. If this is true this has the potential to kill localised franchise websites and independent operators who typically get around 75% of their traffic from Google.
Google advised they would like to work more closely with Fairfax & REA who are currently refusing to list their properties on Google Maps. What is interesting is that a majority of the real estate groups are using Google Maps to display their listings, which makes people comfortable with using Google Maps for real estate. Another interesting future development unless these independent real estate portals have a Google Maps Premier API key, Google can potential show their listings on these portals maps.