Realtor.com buys AOL real estate
The real estate listing service will pay AOL $14 million for an exclusive spot on its proprietary service, Web site, and local guide.
Under the terms of the deal, AOL will receive the $14 million payment over the 40-month period of the agreement. It also will receive a percentage of all advertising and transaction revenues.
In exchange, Realtor.com will become the exclusive real estate listing service on the AOL proprietary network's Real Estate Center, on the company's Web site, and within its local guide Digital City.
AOL spokespeople declined to comment on the deal.
Today's announcement signifies AOL's unrelenting ability to attract content providers willing to pay large fees to be featured on the network's family of proprietary and Internet-wide services. Several services, such as Market Guide and Preview Travel also have cut such partnership deals with AOL.
Realtor.com believes its $14 million bet will pay off by giving it direct access to AOL's audience, composed of an attractive demographic: higher-income small families that are known to purchase goods and services online. The company expects doors will open for it to do more transactions, increase ad rates, and eventually charge higher classified fees, said Realtor.com spokesman Peter Tafeen.
Forming partnerships is as important to the companies seeking attention on AOL as they are for AOL, which has been trying to be less dependent on membership fees for revenue. It is increasingly focusing on advertising, commerce, and merchandising.
"It's the same old story: AOL's real estate is very valuable," said Patrick Keane, senior analyst at Jupiter Communications. "It's quite simple: You have 12 million subscribers. In terms of the most valuable real estate to promote your product, AOL is it."
"AOL is very family oriented, not a bunch of young kids saving their money for an ISP," Keane added. "You can say that small-family sector is right up [Realtor.com's] alley."
Realtor.com's partnership with AOL is the latest in a string of deals that the online real estate listing firm has made with highly trafficked Web sites. The company previously inked similar payment deals with Web gateway or "portal" sites such as Infoseek and Lycos, while also signing content-for-distribution deals with NBC Interactive Neighborhood, USA Today, and Classifieds 2000.
Realtor.com will provide AOL users with a database of property listings that feature pictures and facts about houses on the market. The site also will feature links to purchasing ancillary home products, such as gardening tools or auto insurance, even though AOL can still link to companies that sell the same products.
"What we're moving towards is becoming a decision support tool to help consumers understand what goes into the buying process," Tafeen said. "We're betting that people will first want to find a home, and when they find a home they'll want to transact on other offerings."