State of the Portals. Part Two – Domain

7 minute read

Last week we took a look at REA Australia. Today we will take a look at their nearest rival Domain.com.au

Overview: Domain.com.au through Fairfax sat through the early years of this decade and just watched as REA became stronger and stronger, Domain say back and really did nothing about the increasing lead that REA had over them. In fact at one point I actually thought they did not care about the online arena and were happy to just count the dollars from their newspaper classifieds.

However since mid 2006 Domain.com.au has become a serious competitor to REA through robust acquisitions in the online space and traditional media purchases. Yes they have a long way to go and yes they will probably not make it, but I do believe they will close the gap over the next 3 years. This is as long as they show agents that they are in it with them and don’t simply look at growing their business just to charge agents more money. In fact the more listings they acquire, the more visitor numbers they bring in will equal greater 3rd party revenues and possibly stronger newspaper revenues.

Like REA, Domain do play a few tricks with the way they market to Agents, subtleties like being a faster growing portal compared to REA. Well it is easier to grow from a smaller base than one that really does not have too much room for growth. I must say so I do have a bit of a chuckle when I receive their direct email marketing newsletters from time to time. Whilst REA beat on about visitor numbers (and why wouldn’t you) Domain prefer to cut apart the figures and look for sunshine and then market those rays to Agents.

Domain do have the same problem going forward as REA and that is the impending arrival of the large new entrants such as Google, Yahoo and MSN entering with their FREE classifieds websites. Domain are in bed with Google (well sort of) but big decisions are not made locally for this behemoth (Google) and we will see some holding of hands in some areas and competing in others.

The other thing is the Rural Press acquisition. It will be interesting to see what happens to the visitor numbers once all Rural Press Property Guides are branded with Domain and all of their property websites are moved to Domain. This should give them a boost of between 500,000 – 1 million new eyeballs a month, but only time will tell. On this – it is interesting to note that the purchase of www.commercialrealestate.com.au is still its own entity more than a year after its purchase, although I am sure it will be moved into Domain Commercial. So this it seems takes a long time!

Domain have also seen some of their brightest leave in recent months such as Sam Plowman and also some moving to REA. I believe REA also tried to get Sam but he seems to want a little quieter life and good luck to him. If there is a recent lesson in anything it is you must have the right people at the top and MyHome are a perfect example of what happens when you have a bunch of dills running the show.

As for the current website, I have to say that it is way cleaner than REA, it is still a bit of a slow walk to get to listings compared to REA but it is a little more informative on the way – with breakdowns of areas.

Screen space could also be used more effectively but yet again the problem with all of these sites are the fact that they have to accommodate 3rd party advertising and that just makes them look ungainly, dump the banners and go with text based ads that pop out with further information – if the user clicks on it!

If I were to build a real estate portal it would all be about gaining the listings and kneeling before the agents and then finally I would look at 3rd party advertising. This does not downgrade the importance of the site but what it does is get it right for the two main markets and that is the agents and the consumers. 3rd party advertisers do not pay unless both of these groups are well catered for.

Again 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 tips of REA as far as usability goes and that is only really because I continue to laugh at just how little of REA is about properties for sale and lease.

Threats: REA will still be the threat for the next 3 years. Google, Yahoo and MSN are all looming large with their FREE classifieds offerings and this will have a long term impact on annual agents revenues. MyHome will not challenge in its current form but if they get some people that know what they are doing in charge they may pose a threat.

Future: Domain must get cracking and look at new revenue areas for the site. In 3 to 5 years nearly all real estate portals will be close to free for basic listings and this is where Domain must improve. They need to get into other areas to make money out of agents (web design and development, CRM) and at the same time look at getting more agents on the site. Being cheaper than REA means diddly squat if you don’t get the results and whilst they do well in certain areas they also have large areas of Australia where they are weak.

Rural Press will be a boon in rural areas where Rural Press control a large number of newspapers. I do doubt their technological prowess as you have to type in the *www. to get to the site and simple config (2 minutes) would fix that, so they will not inherit any technological geniuses.

* No sites should ever need to type in www. Say those words to yourself and then your domain name w w w dot…… It takes longer to say the www. than it does to say the domain name.

Private Advertising brings in a small yet significant amount of cash and although Domain have been very careful not to promote this and have played it down as hardly anything, I have from good authority that it is around 40-60k per month (about 250 new subscribers Australia-wide per month) of course this is only a rumour and I doubt anyone would actually let me know the real figures but $500k per annum is not small as far as I am concerned.

The Adore Property site has turned into a dud as far as visitor numbers are concerned and I wonder how much longer agents will support a site that does not bring them results.

All in al Domain need to do a lot of work before they will pose a serious threat, but its acquisitions will give it steady growth. The migration of Rural press will take time but if it is done correctly it will give them a great deal of strength in rural areas and bolster their numbers.

If I were Fairfax I would snap up Portplus as soon as possible as this will give them a good batch (over 1000) agents and a very competitive web design/development arm. They need growth and they need a new business to generate more revenues in different areas. I would also look at building a portal for smaller property businesses that want to advertise their services, like builders, bricklayers, plumbers, landscape gardeners and offer them cost effective advertising in certain suburbs. The more suburbs they want their Google style ads in – the more it costs per annum.

Links:
www.domain.com.au
www.realestate.com.au
www.yahooclassifieds.com
www.liveexpo.com
www.googlebase.com

www.facebook.com
www.myhome.com.au
www.adoreproperty.com
www.commercialrealestate.com.au
www.portplus.com.au

Next Week: MyHome

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12 Comments

  • snoop
    Posted July 19, 2007 at 7:12 am 0Likes

    My question would be why does a Media co need to buy a dev co like Portplus for growth?
    Isnt that just buying revenue and the headache of running an IT business,for the sake of it?
    I dont think REA have made a huge success out of buying Hubonline?
    All the media cos need to do is make it very easy for agents to list properties on their site drive traffic and hopefuly deliver enough economy of scale to be able to not be greedy and pass some savings on to the agent base.

  • Peter Ricci
    Posted July 19, 2007 at 8:02 am 0Likes

    Hi Snoop, you are right in many aspects, but if you look at the numbers. Let’s say 1000 agents get web development over 2 years at an average of $5000 per site. That’s $5 million in revenue. Now if you look to the future and see that many of these portals will offer free listing services against the current paid for listings they will look to increase their revenues in other areas and this is just one example.

    I think HubOnline will be a long term strategy for REA as they did buy into a bit of a headache and are currently rebuilding the whole thing (or a great deal of it)

  • Philip Muscatello
    Posted July 19, 2007 at 6:51 pm 0Likes

    What I don’t understand is what was the thinking (or lack of it) behind Adore Property.

    It just seems so obvious to a (dill like me) that you have to start from the agent’s and the viewers point of view.

    For viewers: Why would you go to any site that is limited in any way for the number of listings displayed?

    For agents: Why would you support a site that is so obviously set up to make a profit out of agents for so little return?

    Domain is trying to sell an idea that rich folk are sitting around in their armnani suits, demanding a refined internet browsing experience, away from the riff raff of the regular property market. In their words “a luxurious browsing experience”. What is that – bearskin mouse pads?

    Anyway, after extensively playing around with Google Base, I can only see a great period of fragmentation and chaos ahead of us! Looks like fun.

    Regards,

    Phil

  • snoop
    Posted July 20, 2007 at 9:30 am 0Likes

    Yeah Pete
    But…what do media cos know about software development.
    They usualy screw things up.
    Agents would be smarter finding a web dev hotshop rather than some corporatised part of a media co with underperforming and underpaid developers.
    It would be an interesting survey to see what the 8k odd agencies spend on web dev per annum thats for sure.
    I doubt its 5m
    Perhaps with the exception of the franchise groups who may spend and waste plenty.

  • Barry
    Posted August 1, 2007 at 10:12 am 0Likes

    Peter – good post

    I am always amazed you never really really give real credit to Domain! It is a far cleaner and easier site to use – and I hear this regularly from industry colleages and also agents.

    They obviously have a team who spend time and effort working on site usability and experience and it shows. What do you mean ‘it is a slow walk to get to listings compared to REA’? I get there in in one click – by typing the suburb into the search box.

    I will say Domain needs to watch itself in terms of its horrible third party advertising that appears to be infiltrating the site. One of their strengths over REA is the lack of ugly sponsored flashing ads, but they are now appearing all over the site. They should be aware that this is REA’s main drawback.
    ….apart from $$$ why would they be allowing this? I agree with you 100% this is the most annoying online habits of these portals. WHY WHY WHY.

    I agree with Phillip – Adore was a joke that just wasn’t funny. I have ‘also’ heard (MY friend attended the Domain conference….probably the same one that let you in on the sensis rumour which I hear is V true Peter) that the ADORE A-DUD was outsourced and built outside the usual development group – who apparently were NOT happy at all with the ridiculous direction it went. I hear it will close soon? Not confirmed though.

    I hear that Sam Plowman has a strong following from his team, particularly the online development groups and he will be missed. Apparently he has restructured to set the new team up before he goes and is still active in the business.

    Lets see how long it takes Fairfax to get its act together and get the RURAL PRESS merger happening.

    Keep the posts happening – Peter Ricci……the Don Chipp of online real estate?

  • snoop
    Posted August 1, 2007 at 11:08 am 0Likes

    Agreed
    REA is a dogs breakfast of confusing messages.
    Domain needs to keep its clean look.

  • Barry
    Posted August 1, 2007 at 11:37 am 0Likes

    It does have a clean look, and strong usability. It has come a long way in the last 12 – 18 months. In fact my mates at REA tell me the domain site development team are their ‘Achilles

  • PaulD
    Posted November 2, 2007 at 4:56 pm 0Likes

    BY THE NUMBERS

    I really don’t know ehere else to put this, but because it is about Domain, I guess here will do.

    I was just having a look at our enquiry rate from Domain over the last 3 months. This gets really weird, so bear with me.

    The enquiry rate has increased dramatically, but when you disect the numbers the following reveals itself.

    Take August for an example.

    Every property has a number of views which is divisible by 3. That’s EVERY property. The same is the case for September AND October.
    In other words over the last three months, every property on Domain from our office,which has been viewed, has a number of viewings divisible by three.

    I am not talking about half a dozen properties. August for example had 201 properties that had property views recorded (note: that number is divisible by 3 as well) Now, another twist. We don’t have 201 properties listed. 76% of them are properties that have been sold, and some of them more than 3 years ago.

    Strangely, (or maybe not) the rental properties had exactly the same situation. Again in August every property that was viewed had a number divisible by 3. The REALLY strange thing about the rental properties, is that there was only one property that was actually available for rent that was viewed. All the rest were properties that had been rented, some of them as long ago as 3 years. I have never heard of a potential tenant who wants to look at a property that is not available. I also tried to find a way on domain to see how you find properties that have been rented some time ago, and was unable to do so. Could someone please tell me, exactly how any of that is possible ????

    In my opinion all that is so co-incidental that it has to be totally unbelievable. Incidentally the total number of emails that we received were divisible by 3 as well, not just the total, the total for each property. As a not so famous person once said ” Please explain” I don’t think I have ever been a conspiracy theorist, however on this one I’m not so sure.

  • PaulD
    Posted November 3, 2007 at 9:45 am 0Likes

    PART TWO

    It gets more serious.
    This morning, Saturday, I wanted to just check the numbers. Lo and behold every part of the Domain site is working EXCEPT where you can check the property views. Just out of interest. Has anyone else experienced this ?

  • Glenn
    Posted November 10, 2007 at 3:27 pm 0Likes

    I actually checked our stats today and just before the stats went skyrocketing just as you described, the stats actually went down. Clearly a total property view count should never go down.. it might not go up.. but never down..

  • mary
    Posted November 17, 2007 at 12:05 pm 0Likes

    Barry, REA make tens of millions of dollars from the Ads you talk about

  • Peter Watson
    Posted February 5, 2009 at 12:11 pm 0Likes

    What about domain’s business for sale site (google business for sale)?
    Why does this site get a mention? I’m sure it contributes are large portion to their business.

    Pete

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