If you are building a real estate search site and you didn’t hear the warning shot fired by Google today, then you don’t really deserve to be in business much longer. While just about anyone building a real estate search tool should be concerned, I’m going to focus this article on my friends over at Zillow…
Zillow: be worried… Be very worried.
Here’s some background… Yesterday I was playing around with some google searches when I noticed a new box that shows up when you do a real estate search… as in [Seattle+real+estate]:
[photopress:google_search_box.jpg,full,centered]
This takes you to a simple (and kind of ugly) results page:
[photopress:google_result_page.jpg,full,alignright]
Where you can also go to a simple (and not very user-friendly) map of listings:
[photopress:google_result_with_map.jpg,full,centered]
My impression of Google’s latest features is that the data is VERY incomplete and the interface is ugly.
So, why should the people behind Zillow be worried?
Three reasons:
- You are not sticky. I’m a hard-core real estate user and after satisfying my Day 1 voyeurism, I’ve never had a good reason to visit your site again. I’ve talked with your staff about this and I know that you are not geared toward a user like me, but I recommend you find a way to create stickiness if you really are planning to be an ad-based media company. Why? See reason #2…
- A super-sticky site only has to be half as good at proving a home valuation to decimate your business. People who start their home search on-line do not start a home search by typing in [www.zillow.com] or even [www.realtor.com]. People start a home search (and especially people moving to a new city) by typing a query into a google search box. From now on, those people are ALL going to see Google’s offerings, and should Google decide to add a valuation tool, the tool will likely be “good enough” so that they never even both going to Zillow. Google only has to be good enough at providing a valuation in order to capture most of your market. Why? See reason #3…
- People are lazy. People don’t use your site to get the “exact” price of their home since you don’t even try to provide it. If you asked 10 appraisers to value a typical Seattle home, you would get 10 different answers and at least a 5% standard deviation in their answers. Even if you can improve your answers by 2% more to match the variability inherent in the emotional decisions associated with buying a home, that is still not good enough. Don’t waste much more time trying to improve your appraisal methods. You’re good enough and soon others (like Google?!?) will have a service that is good enough as well. Instead, find something sticky. You have a very talented team, so I doubt you’re suffering from lack of ideas. Nonetheless, it is clearly time to develop something that will bring me back to your site on a regular basis.
To everyone else creating real estate search tools, I’m not convinced that a vertical real estate search will ever beat Google’s offerings UNLESS they have a much better database of homes than Google. Right now, Google is seriously lacking in quality inventory. However, if the consumers go there (and they will), then you can expect brokers (and someday brokerages!) to follow with their listings.
Wasn’t there an article on Inman yesterday reporting that Zillow is now #5 under real estate search. I’m no technology geek, but that’s quite a good placement for a company only weeks old. No?
Tim
I’m sure if you look closely at a breakdown – they achieved 90% of that number in the first week of release. They won’t crack the top 40 in the next quarter results. The comments here are right on – after playing with it a bit, I’ve realized that the market value of a home, specifically my home – is a very organic thing that is difficult to quantify with some tax accessors and sales history data. An interesting guide, yes, a close approximation – not enough to warrant consideration.
Tim,
I’d agree that Zillow has definitely generated a lot of buzz and they’ve likely seen quite the traffic (hell, even RCG has seen a ton of secondary traffic based on Zillow-related searches). But I’d also bet that even without the Zillow-buzz, real estate related searches on Google (through Google Base) will probably be comparable to Zillow for the month of April. I have nothing to back this up (and definitely no numbers from Google), but an order of magnitude level, I’ll bet I’m pretty darn close.
And all of this traffic from Google will have been generated for a product that is not even any good (yet!).
I think this post is spot on Dustin…
So back to square one….creating a site that is sticky… what do you think a site that wants to be everything to everybody can possibly do on a shoe string budget of 20-30 mill do to be sticky?
I say content is king. Take RCG for example… is your site climbing through the stratusphere because of how great your site looks??
My zestimate is because it has good content that keeps people comming back for more….
heck… and you didnt even have to get any VC for this site.
I will say… your snazzy new head shot might be boosting your search placements…
haha
I totally agree with Giles on Dustin’s snazzy new head shot!
Ardell,
Can you somehow link dustins headshot to technorati and lets see if we can get him ranked for the word snazzy.
so Ardell and Dustin… is there any hope for someone like Zillow trying to take on Google…in terms of being everything to everyone?
Because I think Dustin is right about people being lazy and not wanting to learn new tricks….when they could just use good ole’ google.
I think the increase in search placement has a lot more to do with the snazzy new raindrop icon. (Has anyone even noticed it?)
Serious Question. If Zillow were started by some Zero with no VC, would it be at all interesting?
Hey! Lucky Me! My Zillow value is now $876,000! Up about $200,000 since Zillow’s opening day!
Well you need to throw some my way Ardell…
here I was thinking i was a real estate professional and my house is only worth 36% !!! of what I paid for it 8 months ago.
What was i thinking @$#%@#$^!!!!!!
PS. You guys have mail… and i am off to bed… its late in the ATL.
Hey Dustin,
I actually placed one of my listing on Google’s service earlier today after reading about it on Inman. I also noticed that they are loading all the listings from Homes & Land which is used by a lot of agents aroud here.
A bit like using Craig’s list but without the elegant simplicity. It has a ways to go for zeroing in on properties — I just did a general search on Redmond Real Estate and my posting doesn’t show on the map yet. But…it is Beta…
I cannot get this box to come up. Even if I do the same “seattle real estate” search. I’ll try on a PC tomorrow, but it doesn’t seem to jive with my Mac.
A couple of things –
1) Love the headshot
2) Ditto to the raindrop
3) there are a lot of “bulk-uploaders” in Google Base. Number1Expert is one of the big ones in the Charlottesville area and it seems that they have higher placing than other listings (mine!). I think that the customers want to direct the search rather than have a search engine guide them. Providing data in a format that allows the customer that freedom is important. How the MLS survives, I have no idea. Nice to see that NAR is doing studies now to determine the future of the MLS … while everybody else seems to be innovating.
4) Give Google time. Sometime soon, all data everywhere will be google-ized. As my 11-year old tells me – “you’re either in, or you’re old.”
From my geeky side I really like where it all goes, but from the business side – isn’t it a violation for third party advertisers like Homes and Land, E1N to bulk publish ads in Google Base without approval of the listing agent?
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I’d save the fork for next year. Zillow isn’t done yet and here’s why..
1. Type in Issaquah Real Estate and you only get 1property returned (and it’s in Sammamish). Seems like a dumb Propsmart to me. Nothing to see here, move along…
2. Zillow also has Zindex. Granted the feature is somewhat burried, but it helps with stickiness.
3. Where’s the Google Earth files? Where’s the RSS feeds? Come on Google, I can do better than this. 🙂
I think the problem is that if your a seller, you’re only interested in one piece of data (the price of your home) and you’ll check back maybe monthly. If your a buyer, your intereseted in a lot more (the price & location of all the homes I’m interested in) and you’ll check back daily. Buyer centric sites are more sticky by definition.
Still, it’ll be interesting to see what Zillow does next.
Robbie, you’re saying that Zillow will improve… what about Google – won’t they? I don’t think Google will let it go, unles they have different interests, which I highly doubt.
Google currently has a poorly done Propsmart or Trulia. Will Google improve? Probably, but let’s look at what else Google has on it’s plate
Google Search
Google Image search
Google Local
Blogger
GMail
Google Maps
Foogle
Google News
Google Groups
Google Talk
Google Video
Google Base
Google Finance
Google Toolbar
Google Earth
Google Desktop
Google Web Accelerator
Oh yeah, they also have Microsoft wanting to Netscape them and 98% of their income dependant on Google search.
Real eastate technology for Google is a diversion. Real estate technology for Red Fin, Zillow, Trulia, etc. is mission critical / Job #1. Unless Google throws a lot more engineers on this than Zillow does, they aren’t going to catch them (or even Trulia).
Robbie,
I agree that real estate is not Google’s focus in the same way that it will always be for Redfin, Zillow, HouseValues and/or Trulia. But in the long run, I’m not sure that it matters if they don’t reach the consumer BEFORE Google does. And none of those real estate search sites show up particularly well in Google searches, and Google doesn’t have to be as good as them in order to capture a huge portion of their market. Again, Google only has to be good enough.
For example, RCG arguable lives within the highest density of real estate valuation companies. And yet, when you do a search on [What +is+the+value+of+my+Seattle+home], the #1 result is NOT Zillow or HouseValues but RCG. Now, should Google decide to release a home valuation tool, then they will ALWAYS be the #1 result in a special highlighted box.
There are three ways for the internet-based home valuation sites to get traffic who are searching for their services:
1) Users type in their URL directly (over the long-term this is a very small number)
2) Show up better in search results (and in particular Google results). They can only do this if they start providing content that is relevant to real estate-related searches.
3) Pay for ads (most effectively by using Google’s adwords). I can’t believe anyone would think it would be a good idea for a verticle home search site (Zillow for example) to pay a potential competitor (Google) for traffic. That will only fund a better competitor.
I think it is also relevant to mention that when you provide ads on a website you are getting paid to have a visitor LEAVE your site. Google is a media company and can get away with this because they provide me a good reason to return 20 to 30 times a day. The New York Times can get away with this because they provide me with a good reason to return each and every day. Those are media companies with an ad-based business model that passes my straight-face test.
As a follow up to Google’s power to drive traffic, this post is being featured as a blog post about Google on their new finance page.
That is driving more traffic to RCG then we’ve ever had before and much more than we ever got from Zillow-related posts (which weren’t minor, mind you!).
Returning to a much earlier comment…
Todd,
It looks like Google hasn’t done a complete roll-out of this feature to all their data centers (i.e. the data center that I connect to is not the same one that you connect to). It can take Google days to roll out new features and/or they are known to test out features by only rolling them out to selected data centers.
To give you an idea, here is the results on one of Google’s Data Centers that also doesn’t have the real estate search box yet:
http://64.233.179.104/search?q=seattle+real+estate
Here are a whole slew of active data centers that you can play around on… they often give substantially different results.
I agree with Dustin, they don’t have to be much better, but just good enough – Google already has the first spot placement for the most (if not all) of the competitive keyphrases – now they need to accumulate enough data to be “good enough” and I’m pretty sure they will get there very fast. As for providing comprehensive tools as property evaluation etc – if it’s based on the current local market and pricing – you don’t need a whole bunch of people to create a calculator – just get enough data to make accurate analysis.
Most of the latest Google’s products are very competitive – I think it just proves that they are quite serious. Google has the power – money, popularity, data and brightest minds – it is really hard to compete with.
I think that the biggest deal about this product is that it included into the main Google Search. Neither Froogle nor Google Base will ever attract as much traffict on its own as Google Search does, so it really turns things around now.
Zillow is nothing more than a clever parlor trick. It attracts visitors because it promises what is in high demand–knowing the value of real estate, yours or your neighbors.
Everyone wants to know the value of what they own—has no one heard of Antiques Roadshow and their enormous succcess. Well Zillow is the Roadshow for real estate. Barton is the barker of this tent show saying “come on in and see the real estate kelley blue book”. And the suckers come to look. But no one is buying a Zestimate–it’s just for show. That’s why Z is free–no one would pay for a zestimate. So what’s the deal?
It’s advertising dollars. Because Barton’s magic trick attracts eyeballs he hopes to attract advertisers. And since brokers are used to paying high advertising fees in print & other media, they are very likely the perfect revenue stream. That’s Zillow in a nutshell.
Stickiness is TOTALLY irrelevant for Zillow’s advertising business model. Proof: An ad in Times Square, Grand Central Station, or the Super Bowl is in high demand and therefore very expensive not because of stickiness but because of the number of EYEBALLS that see if for a brief time. Advertising is a numbers game Dustin.
Although, I agree Google has an advantage because of the Google brand, their experience with scalable web apps and their ability to leverage Google’s search dominance.
That said, is that really enough? Perhaps I’m an exception because Zillow is on my radar (and maybe not Joe Consumers yet), but with better tools & web sites just a few key strokes away, I’m not going to stay around and use Google’s real estate tools unless it offers something nobody else does. Now since I use Google’s search daily, they’ll get more changes to capture my attention. But, if link #1 sucks, links #2-10,000 are just a few mouse clicks away. If Zillow starts spending the same money on advertising as HouseValues does, they’d be a lot higher on the consumer awareness scale.
In spite of Google’s dominance, I still visit Seattle Times for news, I still pay to use MS OWA instead of Gmail, I still use Zillow for house evaluation information and I still visit Rain City Guide for real estate information.
OK, Google is like Microsoft in that if they decided to enter a market (and want to dominate it), they have the ability to do so. However, I’m not convinced that the real estate information is a market they want to dominate. Especially, since Yahoo, MySpace, and MSN are much juicier markets.
I think they can just sit back and wait things out untill it is time to strike.
If all your doing is uploading referbished tax data or using google maps to show listings then one of these days google can either take your concepts… take your data sources….link directly to you… or buy you out.
Bottom line, they control the traffic and they control how they fit in to this debate. If they choose to dominate this market they will.
Ps. I was talking about some of this with one of my friends who works for Geek Squad and he had never heard of Zillow. I mean this guy works on RE agents computers everyday… reads the WSG and NY times… and was like huh?
So to us Zillow sounds like a big thing… but to the average Joe… it is still under the radar.
So long as “number of listings'” is the criteria for why someone will visit a residential real estate website, Realtor.com will remain #1. There can be no debate here. It’s on everyone’s list.
But it is important to realize that educated consumers using the net, don’tjust visit ONE website for real estate, even if it has the most listings—they shop around.
I think it is a fundamental fact of the web that people will leave your site (no matter how great you think it is or how much traffic you get) and go to another. Does anyone just go to Rain City for their real estate blog fix?
3 cents,
Do you really need to visit any other real estate sites besides Rain City Guide for your real estate fix?
More seriously, I definitely think that the # of listings are important, but by no means “all important”. But if someone was to provide high quality listings (as in Realtor.com) AND the site is much stickier (as in Google), then they will be very hard to beat.
And while I’d agree that there are multiple sites that people can visit for house listings, I’m not sure they would bother if someone gave them a home searching product that met all their needs. I have no doubt that you, 3 cents, would visit lots of sites, but I’m not sure that most people would. Real estate is just not that interesting of a topic. 😉
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Dustin
As much as I LOVE Rain City, I must confess I see others 🙂 But only because, like friends, each has a unique personality that attracts in different ways.
Re: original post on Z stickiness—I dont see Z as a real estate site—it’s more an ad site in my opinion, hence my comment on #s.
I agree that a real estate site which exists to help bring buyers and sellers together is a different matter & a perfected “spider” or vertical serach engine would do this. But there are problems with redundancy, freshness and quality search.
As to readers going to other sites for real estate—they have to, depending on the particluar need. I think I am in the majority that look in more than one place. Read Jakob Neilsen’s Alertbox on the topic of user behavior and get back to me.
3 cents:
I’m interested in reading what you recommend, but Jakob Nielson is too darn prolific. He has hundreds of articles on that deal with user behavior. Can you send me a link to the article you are thinking of?
Dustin:
Hope this helps. From 2/6/06
http://www.useit.com/alertbox/cross_site_behavior.html
see Jakob’s Law.
Thanks!
Great Read. A lot of interesting comments and thoughts to ponder.
Ken – have a look at this – Google is in the classified business, and this is a great way of getting eyeballs.
Mike.
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No offence….but just because Google is going to develop something doesn’t mean that no one else can do it better……Try point2homes.com for instance. While their searching capabilities lack a little, the amount and quality of data is amazing. They have listings from all over the world. As well, they have mapping and RSS feeds build into the system. If you actually select a home to view, your taken to that agents specific web site…..and wow they are amazing. From Google map listings build directly into the pages, to Google earth downloads, more rss feeds…………by far one of the best real estate sites I’ve ever seen or used
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John,
My guess is that you must work for Point2Homes. The quantity (or “amount”) of data is seriously lacking on the site (I saw four homes in Seattle). With a pretty generic interface and a sparse inventory, I’d say there is lots of room for improvement before I’m ready to say it is one of the better home search sites out there.
First time blogger long time broker. The simplicity of Zillow is what I like. It is easy and fast even with dial-up (yes, 7 seconds is fast for me). I am not a techie, just a guy that does a bunch of deals. I can find a value range of a clients property while I am on the phone with them (long after my appraiser has gone home) Zillow came out when? I have referred the site to many of my clients and friends. BECAUSE IT IS FAST AND SIMPLE! Please refer me to a site that is better. I hope Zillow continues to improve and grow.
Michael,
Zillow is definitely a great product! No argument there! And for the purposes of getting an idea of neighborhood prices, there is no site (that I’m aware of) that has its mixture of simplicity and comprehensiveness. I think that RealEstateABC has some features that might make it a better way to self-appraise a property, but for the purposes of a broker checking out neighborhoods, I definitely say stick with Zillow (for now)!
I do not think Zillow is a great product–it is a great IDEA. Is it simple –of course –but would you pay for a Zestimate–No? would you sell your house solely based on it? No? then how great is it? Oh you will probably say it’s a guide, a tool, a place to start–(nice buzz words ). Ok I give you that–but that does not fit my defintion of “great” . You still have to go further—like hire a broker or appraiser. Once banks use Zillow as a basis for lending money I will subscribe. Only then would I even think of putting the label “great” on Z. By the way, the online valuation model is as old as dirt in your yard.
Also, don’t you realize HUMAN BEINGS have to inspect the Zestimate to say whether it is good or not. (how do you think Z created the error rate? professional “people” of course–did you really believe the machine created its own error rate?) Now applying simple logic here (come on everyone, let’s try it), isn’t it the HUMAN who gave “value” to the zestimate ?-because without the human to check it, how do you really know how off the mark it is?
I am totally amazed by the star struck real estate community (I hesitate to say professioanls because i think most brokers know what’s going on) putting Z on a pedestal (the general public I can understand falling for the hype). As an educated consumer I would run the other way if a broker approached me with a zestimate in his hand and tried to get my listing.
I didnt even get started on all Z’s defects–data lag, useless in an Up or Down market, good only for cookie cutter houses that have turned over in a stable market, no comparison to car values, etc…
If you want more of my rant against zillow go to their blog and read away. Kelley blue book my butt!
PS My pet monkey just threw a dart at the WSJ stock page and hit “Google”. I just renamed him “Great”
3 cents,
You’re always a great read when you come around. Thanks for your perspective!
thanks Dustin. Zillow just gets me juiced 🙂
I thought this was a blog SITE with mortgage and RE brokers…….(PRODUCERS).. Who else KICKED ASS TODAY ?
M
?
hahaha exactly what i was thinking Dustin… ?????
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As Google base future plan is to grow as single individual verticals like Real Estate Google, Car Google, and Apartment Google when they will release the final Google base. With loads of information.
What exactly Realtor.com provides to the end customer, very generic search facility like bedroom, sq ft, and area etc Google base is already having it. Realtor.com is in the business since last 10 – 15 years but do they really added any value to their service to the end customer. Not exactly. Till recently they don’t have map based search. Still this search is not that good. But Information Technology requirement is changing day by day. Customer is demanding more information from Realtors. Provide this and that.
Now if we see Google base what exactly they can provide. Their map is good, earth locator is good they bought YouTube so video media can be another enhancement; they have discussion forum, no limits on the words, no limits on the photo.
So if Google provides these stuff like
Map and Location using Google earth and Google map that will be great.
Video Media Ad for free is great.
Live chat over voice over IP will be a great asset ( it is kind of open house over the net )
Discussion forum like if you have any comment just leave it over there
Pricing of near by homes using Zillow.com open source api.
And some other static tool likes mortgage, school, taxes and other stuff.
So MLS and its public media Realtor.com will survive in future? It all depends how quickly they change their system and keep their technology basket up to date. If they don’t they will be just another real estate search engine and they will loose primary search engine of real estate
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Hello guys,I’m kind of new to blogs and Google.Can somebody tell me what is Google Base?And I just heard of one more Google Earth.
Any idea?Could be good to ad my profile there?I have a home inspection bussiness HomeSpector Inc.in Farmingdale(Long Island, N.Y.),and a Website http://www.HomeSpectorInc.com. Please tell me what you think about it.You can email me.Thank you very much.
Tommy
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