State of the Portals. Part One – REA Australia

Over the last 12 months we have seen many new entrants coming into the market offering cheaper annual plans, different strategies and grandiose claims. But what impact have these new entrants had on the marketplace and what if any will they have in the future? Over the coming weeks I will write about each of the incumbent portals and take a look at some new entrants in the marketplace. I will also look at some overseas developments and see what impact if any they will have an impact on the Australian Market.

Firstly we will take a look at the giant of Real Estate in Australia

Overview: Without doubt the leader in most regions of Australia. Will continue sit around the 3.5 – 4 million mark in visitor numbers. REA will struggle to grow this number in Australia because let’s be honest how much more room is there for growth? REA has a number of problems. To begin with REA are the best at what they do and all large media companies love the marketing spend of real estate agents, so they will never be left alone to sit and count the cash.

Another problem is that in the next 12 months we will see large new entrants such as Google, Yahoo and MSN enter with their FREE classifieds websites. REA will continue to be aggressive in international acquisitions and will look to see its revenue base expand as it continues to make purchases in weak competitive markets.

As for the current website it is getting a little long in the tooth and REA will no doubt look to launch a new site soon. They will also need to forge closer ties with agents and make them feel that they are pulling together in the same direction, this sometimes means dropping the tough stance on fees and being a little more flexible. The new site will really need a stronger clearer focus on agents property listings rather than 3rd party advertising. The company will also struggle in the long term to lift revenues from agents as competition will drive down annual fees significantly into the future. The site still performs day in and day out and with more than triple the daily unique browsers of its nearest competitor will see it reign at the top for quite some time.

Threats: Fairfax ( has now Rural Press in its bed and with the Macquarie Media going top to tail – REA will have its hands full keeping an eye on its local business whilst pushing to grow internationally. Google, Yahoo (maybe partner with News Ltd in talks) and MSN are all looming large with their FREE classifieds offerings and this will have a long term impact on annual agents revenues.

This creates another problem for REA. Once the FREE classifieds sites come online will also have to be very careful about intrusive 3rd party advertising as Google, Yahoo and MSN classifieds websites have a very clean and unobtrusive advertising model that has a strong connection with site users. Google Base will be the main problem once they launch here in Australia because Google will also include its classifieds listings in search results meaning consumers can get this property information from the search engine without having to go to another website. MyHome has had no impact whatsoever on REA and I doubt they have the know how and mettle to make a challenge in the short term. However MyHome cannot be discounted in the long term IF they stay the course and admit to – and fix the current site.

REA recently integrated/added the Home Renovation section to their website and it has an impressive array of articles and hints and tips for home buyers and renovators. This will no doubt bring in more advertising revenues and has been a great addition.

Future: REA will eventually do a deal with MySpace (which will carry REA listings much like Facebook now do) and possibly Yahoo if Rupert gets his way. They will continue international purchases and growth of many of these fledgling companies and I see real potential here for them. They have already seen impressive growth in New Zealand and the UK and will continue to push heavily in these areas. Will still be at the top in 3 years but its lead will dwindle and their agents revenues short term will stagnate and then fall dramatically once the free classifieds sites start to bring agents results. All in all I think the international future is bright, but Simon Baker and his team will have their work cut out for them to stave of competition from rivals even his hip pockets and visitor numbers cannot match. I see a Digital TV station (IPTV) feeding data to lounge rooms and possibly a TV show on a rival network to Nine.


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  • snoop
    Posted July 11, 2007 at 7:49 am 0Likes

    True crossmedia promotion has been taked about for 10 years.
    Its the diversified media cos greatest opportunity.
    Listings on myspace….well maybe rentals ,not sure how much of the myspace demographic would be buyers.
    I wouldnt panic about Google or MS.
    They will alow listings from the main portals and as they have the most they cant really lose.

  • Elizabeth
    Posted July 14, 2007 at 9:29 am 0Likes

    Good Morning,

    Peter, you may want to write about myhome fast. This very morning I received an email from a colleague which contains a ‘Crikey Article’. Not sure what a ‘Crikey Article’ is, however the content was very interesting.

    ‘ is being shopped around for interested buyers – rumours of buyers in the mortgage space taking an interest. Bell Potter is closely involved in sale and potentially conflicted due to equity stake in MyHome. Is this a record for NineMSN or an indication that the new owners will not cop losing businesses for any length of time?’


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