Google in real estate

‘Google whispers’, ‘rightmove tumble’, ‘Google looms large’, the headlines were everywhere.  Following the FT, all the other papers got in on the action and as I sat on the train the other night I spotted the Evening Standard was also running a ‘rightmove shares crash’ story.   Even the BBC got in on the act.    The EAT carried its usual comments of death to all and I was half expecting to see Rightmove effigies burning in the streets.    Rightmove were forced into making a statement.

But what has actually happened?  I suspect many traders and investors were asking the same question and the answer is, well …. not much really.   Yes we have all been commenting on what Google is doing elsewhere in real estate, but no one at Google has made a statement about the UK market.     Yes, Google are in town and doing the rounds, they are seeing a few people over the next couple of weeks, but with no statement of intent the market was simply reacting to one story it didn’t fully understand.

Let’s not forget that in August 2009 Rightmove shares were around 4.00 and at the beginning of the year they were only 1.60 odd.  Rightmove shares are currently bouncing around 4.70 to 4.80 mark and the  papers have now moved back to proper news such as Katie Price’s love life.

Property Portal Watch rightly asked what all the fuss is about and have prepared some statistics from the Australian market.

From their post ‘… Google “entered” the Australian market 6 months ago (July 2009) when they made it possible for agents, brokers, franchise groups, and portal sites to place their listings on Google Maps. When a user does a search on Google Maps (not the main Google search) for real estate, Google plots the houses in its database on the maps and users can then click on the various dots to see if they like the houses and then are driven back to the advertiser’s site.

At that time, there was a similar uproar and many were predicting the death of realestate.com.au and domain.com.au and the REA Group share price dropped nearly 7% from $5.90 to $5.50. However in the 6 months since the announcement by Google, the REA Group share price has increased 53% to $8.44, the traffic to the site has increased from 4.5m UB’s in June 09 to 5.4m UB’s in October and analysts are predicting an additional 20% revenue growth for the REA Group in FY 2010.

Keep reading the threads of discussion over at JRA as there is a whole host of information on this subject and there will be much more to come.  Property Portal Watch will be posting a series of articles which will undoubtedly be essential reading.    Dan Hare over at the Academy also has a good blog worthy of a read.

Any talk of google damaging estate agents is misplaced.  Indeed, if Google makes  searching for property easier it is common sense this will benefit agents.  At least those that recognise the importance of  having search friendly pages and take the time to feed into google.

Straw poll – how many agents currently feed property into Google?

This will keep commentators and pundits busy for a while, but what would be of extreme importance is quality research.  Fully understanding user behaviour (to local level) in google property searches will become paramount.

I of course told you this would happen in 2008 so I will be talking about changes in 2011 (smug), but I doubt my comments will have such a dramatic effect on share prices.