Realestateview.com.au has acquired troubled portal MyHome.com.au for an undisclosed sum in a move it says will provide traction to gain market share and challenge market leaders RealEstate.com.au (REA) and Domain.com.au.
But former REA chief Simon Baker says the gap between the two market leaders – and RealEstateView is so large they won’t be able to catch up unless they put in some significant work.
“This won’t shake up the market. MyHome hasn’t been moving for a couple of years. It has a little bit of traffic but basically no revenue. The game for all these portals is volumes of traffic, but put them all together and they are nowhere near Domain, which is half the size of REA.”
RealEstateView says the acquisition will add to its platform in New South Wales and Queensland, and assists with the recent content-sharing arrangement deal struck with the Real Estate Institute of Australia. General manager Petra Sprekos says the deal is all part of the larger plan to take on the bigger players.
“I guess the deal has been in the pipeline for a couple of months now and we’ve been to work trying to get it all down,” she says.
“From our perspective, there are two very dominant players in this space and a whole lot of smaller players fighting for attention underneath them. Our growth in New South Wales wasn’t going to be easy if we didn’t look at what was available.”
Sprekos says RealEstateView, which was established nearly 10 years ago is operated by various real estate institutes, has giant aspirations. “We want to be a strong competitor in the marketplace and we see this as a step forward.”
Sprekos would not reveal a purchase price.
David Airey, president of the Real Estate Institute of Australia, says a number of acquisitions could give rise to a third major player.
“We know RealEstateView is covered by the institutes, which covers pretty much all of Australia. And recently the REIWA acquired Aussie Home, so all the dots are connecting in a plan to have a national institute and data portal covering the country.”
“RealEstateView has been very successful in Victoria. We need to put some elements together, particularly in Queensland. I think RealEstate.com.au and Domain should be looking very carefully at what’s happening.”
MyHome has certainly had its share of troubles. Its owners, PBL and Microsoft, pumped tens of millions into the site in order to steal some of the market away from the larger players, but it ultimately failed. Plans included a plethora of advertising, and even a television show on the Nine Network.
However, the site never found much traffic – and Baker says that’s the key issue.
“The question for any attacker is, how do you generate enough revenue and traffic to launch a serious marketing campaign that will convince customer to move away from RealEstate.com.au? That’s a big ask and there’s a long way to go before that occurs.”
“I would have made the same choice with the acquisition, because it does give them a little bit of traffic and I’m sure they didn’t pay much for it. But it doesn’t change the game, just creates a little bit of noise. There have been plenty of attackers and none have made a dent.”
Sprekos admits this, saying that “we want to be a strong competitor… but if that means going head-to-head, we still have a long way to go”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
