Real estate the next big portal thing?
Big virtual properties online such as AOL and Microsoft are hoping to cash in on the lucrative business of selling real estate.
Americans are expected to spend more than $1 trillion on home mortgages and $60 billion in transaction fees this year, according to online real estate news service Inman News Features.
Microsoft today became the latest player to push real estate services onto the Web with the launch of its Microsoft Home Advisor Web site. AOL also announced today it had added its own mortgage channel powered by Microsoft financial software nemesis Intuit to its list of real estate services.
The AOL launch is part of a three year, multimillion-dollar deal inked between AOL and Intuit in February. The new service is another addition to the many features, such as real estate listings by Realtor.com, within AOL's active Real Estate Center.
"It doesn't take long for any new medium to see [real estate] as a gold mine," said Bradley Inman, who publishes Inman News Features. "Everyone wants to edge their way into these numbers."
On the advertising front, real estate services also provide significant benefit and value, Net companies say, following the model of the print world, where a sizable portion of advertising dollars made by newspapers come from real estate listings.
But the Net's services' ability to customize to user preferences gives online firms an added advantage. Yahoo, for example, views real estate listings as a way to target advertising toward specific markets, such as serving regional ads for people looking to move to a certain location. And, since most users who visit the sites are buyers, it may add to the appeal for these services.
"[Yahoo visitors] have transactions on the brain when visiting our sites," said Jim McCarthy, senior producer for Yahoo Real Estate.
Despite the enthusiasm among portal firms, there are still holes to be filled before the Internet becomes the preferred medium for real estate transactions. For example, real estate buyers generally are not repeat customers, unlike Net users who return to sites regularly to buy books or trade stocks.
"It's not a no-brainer," added Inman, in reference to the difficulties sites may face when trying to generate significant revenue from online real estate transactions. "These are big transactions with many dollars involved."
Nonetheless, analysts say Net-based real estate services could become the next battleground for eyeballs, advertising dollars, and transaction fees.
Certainly the addition of Microsoft into the landscape would make it a tough game for the portal competitors.
Microsoft's advantage lies in its integration of many services into one personalized application, said Vernon Keenan of Zona Research.
"It's the simple thing of being able to take a personal profile and populate each step in the home-buying process, which will save people a ton [of time and money]," added Keenan, who touted Microsoft's product after viewing a demonstration.
"Microsoft is offering the first home-buying wizard where other portal sites are offering home-buying pieces," he said.