Onthehouse.com.au to launch an $80 million IPO

As reported by SmartCompany today Onthehouse.com.au a mid sized Australian real estate portal is seeking to go to market to raise funds through an IPO.

Recently appointed chairman Jim McKerlie confirmed the float to SmartCompany this morning indicating they’re expecting to lodge a prospectus in the near further, with some reports indicating this could be as early as April 21.

Onthehouse was launched back in 2006 and initially only carried properties across Queensland. They quickly expanded interstate and now list properties from all across Australia. Their point of difference with their business model is the emphasis they place on past sales data and providing website users with useful comparative sales data.

The company is planning to issue 50 million shares at $1 a share in an effort to raise $50 million, leading to a market capitalisation on listing of $80 million.

“The capital is being used to accelerate the development of the company,” McKerlie says.

Given Onthehouse is a free to list portal this is a significant capital injection. If the IPO is a success then I hope they allocate a reasonable amount to R&D in an effort to bring the best technology to market. This injection should also provide Onthehouse with the marketing budget needed to take on the major real estate portal players in the Australian market.

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86 Comments

  • Charlie
    Posted April 16, 2011 at 12:08 am 0Likes

    I also read this on SmartCompany today with a touch if disbelief (I’d never heard of them… more fool me) – they claim $275mn revenues? I estimated the total size of the online real estate market (last year) was $250mn… they make money from sales evidence? Still confused.

  • real estate
    Posted April 16, 2011 at 2:17 am 0Likes

    April fools day was a few weeks back right?

  • Vic
    Posted April 16, 2011 at 7:23 am 0Likes

    I thought that April fools day was 15 days ago.

    Raising $50m and capitalizing at $80m mmmm? Mis-reporting or does the company really think that it is currently worth $30m before the float?

    Having trouble finding the original report in the Financial Review and I can’t find anything on their own blog re the proposed IPO.

  • Ryan O'Grady
    Posted April 16, 2011 at 7:51 am 0Likes

    Let’s break down their revenue stream.

    1. They don’t charge agents to list on the portal.
    2. They don’t appear to offer agents paid upgrade features
    3. They do charge private sellers.
    4. They don’t charge for any of their sales data reports (not from what i can see)
    4. There is no 3rd party advertising on the site.

    Does this mean private sales revenue is making up the $275m?

  • Vic
    Posted April 16, 2011 at 8:48 am 0Likes

    Ryan and Charlie,

    The $275m revenues is not what onthehouse predicts. The AFR report is referring to the Witchery group’s prediction for 2011. AFR added this as a separate report under the onthehouse announcement.

    Nonetheless, Ryan, your points are well made. The interesting thing about this site is that it is using a very user unfriendly search system which is very difficult to navigate and does not reflect some of the later technologies of search by keyword/phrases or even, for the future, voice recognition.

    At this stage it is not even representing a medium percentage of the the total market listings.

  • Glenn Rogers
    Posted April 16, 2011 at 9:37 am 0Likes

    Leave off the zero end me $8 M and I’ll do a far better job……..from scratch.

    This will fail, you read it here first.

  • Vic
    Posted April 16, 2011 at 9:42 am 0Likes

    Dutch auction Glenn- give me $800k and I’ll do it from scratch.

  • So I hear
    Posted April 16, 2011 at 9:50 am 0Likes

    The valuation factors in they have bought Console and PortPlus and are going to use Agents’ data to populate the site

  • Glenn Rogers
    Posted April 16, 2011 at 12:56 pm 0Likes

    “The valuation factors in they have bought Console and PortPlus and are going to use Agents

  • Tatiana Mijalica
    Posted April 16, 2011 at 1:26 pm 0Likes

    “The valuation factors in they have bought Console and PortPlus and are going to use Agents

  • Glenn Rogers
    Posted April 16, 2011 at 1:30 pm 0Likes

    I think I’d hold judgment there Tatiana, from what I know this could be the real deal, I’m very skeptical of just about everything but this could be different.

  • Tatiana Mijalica
    Posted April 16, 2011 at 1:35 pm 0Likes

    Fair point Glenn.

    As long as they can get it right first time around and there is no mess/dramas to clean up, I’m happy:)

  • Vic
    Posted April 16, 2011 at 1:37 pm 0Likes

    From my reckoning, Console and Port Plus have around 1200 agents between them- would think it insufficient to have a high content sight.

    They may have to buy out Renet, Iwon, Inhabit, and your crowd Ryan. (Can I buy share in Agent point now Ryan). Hookers, Elders and Harcourts have their own bulk uploader so maybe they have done a deal with each of them. I notice First National, Century 21 and the Roberts group from Tassie are on their site in numbers, so the portal pusher acquisition is a good move.

    However, $50m is still an April fools day joke- surely! I would still set up a better project without Port plus and console and still for under $0.8m.

  • Robert Simeon
    Posted April 16, 2011 at 1:50 pm 0Likes

    One float investors would be better off ignoring – it will be interesting to see how the instituitions warm to this? Given the content I can only see a bucket of cold water!

  • Glenn Rogers
    Posted April 16, 2011 at 1:50 pm 0Likes

    There’s various ways they could make this work, the primary aim if it were me would be to do it for half the price of the majors.

    Agents will stream on board to get relief and the visibility of the site would soar as the content increases.

    REA is capitalised at $1Billion I’m told, I reckon anyone else would be happy with half of that.

  • Peter Ricci
    Posted April 16, 2011 at 2:44 pm 0Likes

    Hi all, what would be interesting to me is to know how quickly Portplus and Console shareholders will be able to cash out on their shares?

    Normally this is a 1-2 year wait and their whole value would be tied up to this. My company was offered $8 million about a month before the stockmarket crash in March 2001 for a pending IPO.

    Even if I had of taken the money, I would have had to wait 2 years before cashing out – under the terms.

    My company was worth nowhere near that then but we developed software for a Sports Agency which was recently purchased by News Ltd. Back then their IPO was worth around 40 million (from memory)

    If I had of taken the offer – 2 years later that 8 million would have been worth around $80,000 – ouch!

    I always welcome competition for agents and Portplus and Console have built sizable and impressive portfolios as well as great software.

    I just wonder about the particulars and long term dedication to the project.

    Note: My company does compete/work with with Portplus/ Console and I wish them well with their IPO and they do deserve a big paypay.

  • Glenn Batten
    Posted April 16, 2011 at 9:56 pm 0Likes

    Console plus Portplus would be be far more than 1200 agents even allowing for crossover.

    Still $30m for the three seems overly ambitious and it’s no wonder everyone is throwing their hat in the ring. As Peter points out, sometimes these things dont quite pan out though.

    Console to me is probably the most secure of these three. Portplus primary business is still websites and whilst they have a stack of independents they also do the First National network and plenty of other smaller networks.

    It’s much harder to change your property management or sales software that you use in an office than it is to change your website. Portplus has 400+ members just in the First National network which is a lot to lose in one hit if they ever lose the contract. They would fight like hell to keep them but so did the previous supplier when they took over the contract.

    As to portals, Myhome v1 proves throwing money at it does not guarantee a success.

    I guess we will have to wait and see what they plan to do with the $50m … That will give us a glimpse into what they are planning… I just hope its not just to advertise the portal side of the business. The only winners then will be media companies..

    I too wish them all the best…

  • Glenn Rogers
    Posted April 17, 2011 at 11:40 am 0Likes

    This could be a blessing in disguise, do you realise what might happen if REA or Fairfax bought Portplus and/or Console ?

    These monopolies would get condsiderably stronger and any chance of competition to regulate prices would be out the window.

  • Ryan O'Grady
    Posted April 17, 2011 at 8:46 pm 0Likes

    The purchase of Console and Portplus will provide Onthehouse with a lot more past and current data. However, they

  • Ryan O'Grady
    Posted April 17, 2011 at 9:03 pm 0Likes

    Glenn, they may be interested in Console but I doubt Portplus.

    News purchased HubOnline and it wasn’t that successful with HUB’s client database diminishing significantly (although they appear to be doing things a lot better now through the new GM).

    Fairfax purchased MyDesktop and then knocked the web development side of things on the head in an effort to focus on the CRM and property management system. MyDesktop has grown significantly now with large networks like Roberts, Richardson & Wrench, Raine & Horne, RayWhite last year and recently (I

  • Glenn Rogers
    Posted April 17, 2011 at 9:48 pm 0Likes

    I think they’d be crazy to take Console withour Portplus as well, if they’re going to do this they had better do it properly.

    This is all speculation at this stage anyway.

    Your comment about REA was interesting, I’ve noticed lately they’ve changed things and have too much happening, too much trying to load on the page at once.

    They forget people just want to search real estate, they aren’t interested in bells and whistles that interfere with the process, make it faster if you have to change anything cut down on image weight but don’t use technology for the sake of it.

  • Vic
    Posted April 18, 2011 at 2:31 pm 0Likes

    A portal site needs content which represents all or at least 90% of the property listings in Australia to be in a position to threaten REA or Domain. It also need a simple search process and needs to be fast. I agree with Glenn R, that it does not necessarily need the bells and whistles.

    Can it be confirmed that Port Plus and Console have agreed to sell , as all we have in this regard is “So I hear” ‘s comment above? …. If it can be confirmed then it would be a necessary part of their content building strategy as Melbourne, Canberra, Perth and Hobart are sparsely represented on their site at present. I believe Port Plus is strong in Victoria.

    Will be interesting to see the IPO details and the prospectus strategy- if it comes about.

  • Sam
    Posted April 18, 2011 at 3:57 pm 0Likes

    Domain and REA must be terrified.

  • Bill
    Posted April 18, 2011 at 4:32 pm 0Likes

    If they do achieve a high percentage of listings and a killer user experience, what good would it be to them unless they can get their brand known nationally.

    How would they plan to do that. Taking on REA and Domain would be a huge challenge and would take mega dollars.

    At the moment Onthehouse doesn’t rank highly in Google on real estate terms so that would be one challenge they would need to overcome.

    I find the whole idea of the IPO fascinating and look forward to it all unfolding.

    I’m leaning towards a buyout of the buyout by one of the majors. That includes Google.

  • Richard Stanton
    Posted April 18, 2011 at 9:23 pm 0Likes

    We have been a user of Portplus for some time. We have also been a client of Domain and REA with the latter not offing a great experience. Over the years I have seen the two major portals build a position of ever increasing dominance. this is dangerous.

    If Onthehouse can offer a viable alternative by potentially partnering with two other strong companies then surely that is a positive for our industry.

    During my dealings with Portplus, I have found that they truly have a commitment to ensuring that agents retain the financial upper hand so that the large portals a kept on their toes.

    I say good luck to them.

  • Ryan O'Grady
    Posted April 19, 2011 at 8:43 am 0Likes

    You’re right Bill. Look where REA and Domain are market leaders, it usually follows where Fairfax and News have print domination. Onthehouse have no print presence and they will not be able to pay for it. Just look at the issues experienced by Vic when he attempted to book an ad in a TAS paper for watersidepropertysales…….he was rejected!

    If print dies then browsers will read news online through the same media outlets, their policy won’t change and they will continue to ban adverts from businesses threatening any arms of their empires.

  • Glenn Rogers
    Posted April 19, 2011 at 8:52 am 0Likes

    Ryan when was the last time you looked for real estate in print ?

    You might glance at something briefly if it’s thrust at you but if you’re seriously looking you go straight to the web, print is out of date by the time you turn the page.

    Fairfax had the chance to dominate on the back of print in the early days and they didn’t capitalise on it, but what good is it to them now ?

    Sure it helps but it’s influence is marginal and if the structure wasn’t already in place you wouldn’t even dream of creating a print backup to your on line portal.

  • Vic
    Posted April 19, 2011 at 9:08 am 0Likes

    Definitely the national presence will be a high priority for onthehouse.
    Allhomes.com.au started their national expansion by tackling the Tasmanian market place. They did it with constant advertising on local TV for several months. They gained significant buyer exposure and a significant number of agents signed up…. however, at what cost for a market of 0.5m population?
    They obtained a federal loan/grant of $1m for the expansion and I would bet most of this was spent on the Tassie campaign, as looking at their site I cannot see any real growth in other States.

    Maybe, this highly profitable Canberra portal should have gone IPO rather than loans.

    Television and radio would seem the main brand advertising vehicle available to onthehouse. Allocating $20/30m to brand advertising via these mediums and $10m on online advertising may get them up and running. However, I fail to see a sustainable revenue stream for shareholder return from the model they have at present. Who knows though- maybe coming in with a pay per lead model might be the answer…… again we all speculate on this interesting development.

  • Ryan O'Grady
    Posted April 19, 2011 at 9:21 am 0Likes

    Glenn, I haven’t purchased a paper in years but I often see the SMH lying around in cafes and other places. I’m not looking for a house but as soon as I open the paper I see Domain. It’s this brand awareness that Domain and REA receive through their media owners that Onthehouse can’t replicate.

  • Bill
    Posted April 19, 2011 at 1:20 pm 0Likes

    I think that’s correct Ryan and I agree with Glenn, few people would buy a newspaper these days to look for property but newspapers and magazines are used by proprietors for portal brand awareness, and boy do they protect their territory.

    We attempted to advertise our regional portal in the Canberra Times but were refused permission to do so. We didn’t want to advertise properties but just our brand.

    So if onthehouse suffers the same refusals nationwide in print media and they don’t rank in Google, what’s left to them. TV, Radio?

    I would like to know what ideas this forums contributors would have for branding a new portal either nationally or regionally. As stated earlier just putting a killer portal online providing a cutting edge user experience is not enough unless the band can saturate the buyer and seller market.

    I was interested to read that Charlie had never heard of onthehouse and that’s from someone who is neck deep in the industry, so what hope do they have getting their brand in front of the punter.

    To quote Sam “Domain and REA must be terrified”

  • Glenn Rogers
    Posted April 19, 2011 at 3:00 pm 0Likes

    Bill,

    I would create the site so that it’s fast and easy to use with correct SEO in place.

    I then offer listings free until the agents phones ring.

    Deliver service like agents are expected to do, fix things now not later, respond now not later and do it right.

    Use people that know service and know agency.

    Then wait……………the more money you throw at it the more pressure there is to perform to a time scale you have to let it build by itself to a great extent with the proper support.

    Unless it has good organic placings in Google it won’t work and that takes time.

    When it reaches a certain momentum and you KNOW it’s going to work throw everything at it, all income back to the site for at least a year.

    Build it from the back up, ie agents first then all else will follow.

    AND promise to do it for far less than the present sites and keep it that way.

    I think it can be done but it wouldn’t be easy.

  • Bill
    Posted April 19, 2011 at 3:20 pm 0Likes

    Glenn,

    You wrote: I then offer listings free until the agents phones ring.

    Who would you offer the free listings to?

    Assuming you mean the agents.

    How would you get the message out to the agents to list on the new portal?

    How would they then submit the listings?

    The majority would not login to a new portals backend to submit listings, they just don’t have time and wouldn’t see the point if it’s a new portal.

    If the strategy was to have properties fed to the new portal via existing uploaders, that would be massive battle, I can attest to that first hand. The only flexible company I know of is “Agentpoint” the rest are mainly obstructionists.

  • Tatiana Mijalica
    Posted April 19, 2011 at 3:33 pm 0Likes

    With no disrespect to On The House, my money is on this little horse that has just done a fantastic redesign http://www.thehomepage.com.au

  • Glenn Rogers
    Posted April 19, 2011 at 3:36 pm 0Likes

    Free listings to the agents of course.

    They could submit manually or via their uploader, the uploader would play along if the agent requested it.

    There are plenty of agents out there who don’t use an uploader as they don’t have all that many listings.

    How do you get the word out ? you need to know some of them, once one or 2 come on board others will follow, never rush it, let it go at it’s own pace once the word spreads that the service is excellent and it’s free so why not ? more will follow then more etc then you wake up one moring and it’s getting serious.

  • Glenn Rogers
    Posted April 19, 2011 at 3:44 pm 0Likes

    Tatiana I’ve always thought it ahould be free but it doesn’t work that way.

    These guys have nothing on their about us page to identify themselves and no address in the contact us section.

    That doesn’t help credibility.

  • Tatiana Mijalica
    Posted April 19, 2011 at 3:55 pm 0Likes

    The fact that they have no address or more About Us doesn’t worry me.

    What doesn’t build credibiltiy is that On The house are using First National and Barry Plant logos that have not been in use for months as both companies have done a rebrand.

    Have a look through the Find An Agent section – not even the logos of the same company are the same or even the same size.

    http://www.onthehouse.com.au/find_agent/

    Major fail.

    Check out this page:
    http://www.onthehouse.com.au/real_estate_agents/

    I rest my case.

  • PaulD
    Posted April 19, 2011 at 7:25 pm 0Likes

    REA & Domain may not be terrified, but it must be strange to be hated so much by your own customers, that they are plotting openly to undermine you.
    Well, it’s entertaining to watch at least. I remember saying here some time ago, the agents unfortunately, are easy to divide and conquer, and they don’t realise that the big portals need them more than they need the big portals. Try telling that to an agent, and they will look at you like you have 2 heads.

  • Glenn Rogers
    Posted April 19, 2011 at 8:24 pm 0Likes

    Fairfax once thought they were invincible.

  • Sean Condon
    Posted April 19, 2011 at 11:36 pm 0Likes

    They have a revenue of $17 mil in 2011 and $21 mil in 2012. A PE of 16.5 or so. Obviously RBS morgans and Wilson HTM are under writing it. Mind you those 2 gun brokers don’t take everything that is around. So obviously they must see something that we don’t in it!!!!

  • Vic
    Posted April 20, 2011 at 5:22 am 0Likes

    I have been saying for months now that the portal industry in Australia is in a state of flux and it needed an entrepreneurial approach from one of the existing free to listers.
    It is the consumer that will drive the success of this venture: therefore content first, a huge ongoing brand marketing campaign, monetizing on a user pay system, a web site that is fast, clear and functional and exceptional dynamic leadership.

    On the face of it main concerns would be:

    – functionality of the site. Would need a major rehash and looking at thehomepage design would be a steop in the right direction.
    – potential huge pay outs to integrating partners
    – lack of capital for ongoing brand awareness. Depends on what is left after integrating partners are paid out although I understand that shares are likely to be held in escrow for up to two years.
    – no real proven dynamic leader (a la Simon Baker)

    I understand that the portal model will be a free to list/pay per lead and this will be ground breaking for an Australian portal.

    Port Plus and Console are two good partners to have on board but I guess that their own businesses will be feeling the pinch in the coming months as the real estate industry continues to decline. But their risk comes with them being able to maintain or increase share value. Unless of course they get a payout up front.

    In all a tricky IPO that will have the speculators in a frenzy and the long term investors wary.

  • Vic
    Posted April 20, 2011 at 8:24 am 0Likes

    BTW Glenn B,

    Port plus- according to a pre IPO presentation- has access to 1000 agents in Aust/NZ and doesn’t say the split numbers between the two countries. Some time ago, when we were negotiating a feed from Port Plus, I had difficulty getting a split or even an accurate number from them. I was given to believe that they had around 600 in Australia. Last night I had a phone discussion with a fellow portal owner who was told by Port Plus that they had 2500 agents- so I’m confused.

    Maybe with FN’s coming on board that is how they got to 1000.

    So, I have no idea really what access they have to agents data but I still hold to the view that listings content will be one of their biggest challenges and will probably need to court the remaining CRM/multi listers to make it work.- just IMHO.

  • Glenn Rogers
    Posted April 20, 2011 at 9:11 am 0Likes

    Tatiana – nothing about them in the about us page and no address in the contact us page are major impediments to credibility.
    I’m a national editor for DMOZ that provide the directory listings for Google and I can tell you thehomepage wouldn’t even be listed because of that.

  • Tatiana Mijalica
    Posted April 20, 2011 at 9:48 am 0Likes

    Domain, Homehound, Realestateview, On The House and REIQ’s property search don’t have an address in their Contact Us either. REA did not have one until the change over to the new site last year.
    A street address for an online business is not relevant at all. .

  • Glenn Batten
    Posted April 20, 2011 at 10:00 am 0Likes

    Vic, Whether you believe Portplus’s hype of 2500 or an official disclosure for the market of around 1000 collectively the two business of Console and Portplus would have well in excess of 1200.

    If the real number is 1000 about 50% of their business will be with one group…. which to me makes Console the safest bet out of the two… .

  • Glenn Rogers
    Posted April 20, 2011 at 10:35 am 0Likes

    Domain links to Fairfax Media with full contact details.
    Realestateview have full contact details in about us
    Homehound – I actually listed that in DMOZ so it nust have had an address in there as some stage.

    No address smacks of being invisible , unable to be found, shifty.

  • Glenn Rogers
    Posted April 20, 2011 at 10:49 am 0Likes

    REIQ search is part of the REIQ web site with has details of all offices.

  • John Anon
    Posted April 20, 2011 at 12:59 pm 0Likes

    if port plus was sold, how did they ever get through the due diligence test?

  • Vic
    Posted April 20, 2011 at 1:41 pm 0Likes

    The point I was trying to make, and obviously done badly, is that both Port Plus and Console will not have enough to fully content the site and it would need to make arrangements/partnerships with all the others, then also pick up the rest from a substantantial and ongoing Brand marketing program to pick up the the stragglers and do deals with the franchisors who are not with them etc etc.

    And yes I agree that console is the jewel.

    What do agents think about a free to list/pay per lead model— would it be readily acceptable?

  • Poppy Highett
    Posted April 20, 2011 at 2:21 pm 0Likes

    Tatiana, you are very passionate about thehomepage.. I don’t suppose you have some type of affiliation?

    But in any case this sounds very exciting (if it is to be believed).. good to see some Aussie companies giving it a go, and with the calibre of board members currently committed, maybe there is something lurking that is not yet apparent. All the best to you I say!

  • Ryan O'Grady
    Posted April 20, 2011 at 2:31 pm 0Likes

    Sean, who are you referring to here?

    “They have a revenue of $17 mil in 2011 and $21 mil in 2012.”

    Vic, I think that is an interesting concept but how do you deal with spam and rubbish leads. Agents will only want to pay for genuine leads…….could be a headache to manage.

    Anyone know how the pay-per-lead portals in the UK deal with this issue?

  • Glenn Rogers
    Posted April 20, 2011 at 3:58 pm 0Likes

    Stayz run a pat per booking model, not sure how they police that, I think there’s an honour system involved somehow.

  • Glenn Rogers
    Posted April 20, 2011 at 4:05 pm 0Likes

    I guess one way of doing it would be to use the stats for the listing and make an assumption – that for every X views you assume a deal was done, or you pay per clickthrough to the listing.

    Whichever way it goes it will end up the same in the end only you will be able to see what you’re paying for.

  • Vic
    Posted April 21, 2011 at 1:48 pm 0Likes

    Zillow has just announced their IPO for $51.75m raising. A snapshot of their IPO offer shows:

    2010 Revenue $30.5m
    2010 Loss $ 6.7m
    UV’s 3/2011 19.4m (one month)*
    Sales & Mkt costs 2010 $15.0m

    Which represents the better deal?

    * I question this figure

  • Ryan O'Grady
    Posted April 22, 2011 at 10:11 am 0Likes

    Have a look at this video http://www.brr.com.au/event/78171/rea-group-presents-at-the-asx-emerging-growth-conference-in-london between 9 and 10 mins.

    This is a new product REA say they are going release later in the year. Basically it will:

    – provide vendors with the value of their property
    – inform vendors how many other properties are currently on the market like their property
    – inform vendors how many people are looking for properties like their property.

    Appears REA are already working on more innovative ways to use their sales data for frontend consumers.

  • Vic
    Posted April 22, 2011 at 10:15 am 0Likes

    Sorry to digress.
    Just checking out thehomepage’s “about us” and I find that it gives me more info than most other sites.
    Watch this site fly in the future. Great look, simple and fast. They have an impressive team behind them and are definitely the portal going places.

    The only thing with their revamped look is that I can’t get their main search bar to work. Looks like it is supposed to respond to key words ie Houses in Hobart, but all it does is lead me to homes in Queensland. I guess a little glitch that will be fixed shortly.

  • Glenn Rogers
    Posted April 22, 2011 at 4:29 pm 0Likes

    How relevant is print ?

    Just walked out the front and found tomorrows newspaper already delivered.

    I better have a look to see what the news will be tomorrow.

  • Bill
    Posted April 22, 2011 at 5:01 pm 0Likes

    Ryan I watched the video and tell me if my understanding is correct. REA are heading down a path which will see agents removed from the process of listing properties on the portal. REA want to deal directly with the client thus freeing up the agent to do “what they do best”.

    If that happens I would see it as a huge nail in the coffin of the real estate industry.

    Real estate agents are building the brand of a monster which will eventually kill them off.

    Using AllHomes who service the ACT as an example they charge private sellers close to $1,000 to list. If REA could remove the agent from the transaction between REA and the seller I’m sure it wouldn’t be too long before they would be charging sellers the same as AllHomes. With 1.5 million listing that REA sprout x $1,000 revenues become sort of serious.

    AllHomes are already marketing under the banner “the only marketing your home needs”

    Agencies, beware the big dogs are barking.

  • snoop
    Posted April 23, 2011 at 11:33 am 0Likes

    More interestingly according to the prospectus the 50m raised goes back to the vendors.
    5m of debt is for growth and opex.
    So console and portplus customers might see their prices heading north.
    given Onthehouse has been around 3 years as a consumer site , and hasnt attracted more than 200k ubs it will be a struggle without some significant media spend.

  • Vic
    Posted April 24, 2011 at 6:07 am 0Likes

    Ryan,

    Getting back to my comment on pay per lead. I raised this because it is my understanding that onthehouse has stated that their “conceptional business model” will include revenues from “buyer leads x price per lead”. This is not speculative but seems a given.

    Notwithstanding that the metrics to determine efficacy of calls/leads has not been flagged,and assuming that the metrics will be well developed before launch, I was wondering how agents would respond to this.

    My view would be that agents would jump at this. No monthly subscription and only pay for what is directed their way.

    Snoop,

    The way the IPO seems to be structured suggests to me that $49.3m will be paid out for acquisitions (Port Plus, Console and onthehouse- I presume) and the vendors will also get $26.5m in shares to be held in escrow for terms between 12 and 24 months. This doesn’t leave much for development/redevelopment and brand marketing. Maybe I have some wrong assumptions so the chairman might like to comment.

  • snoop
    Posted April 24, 2011 at 7:03 am 0Likes

    Lets get back to the financials and business model.
    Sub 200k ubs for On the House.
    A conversion rate of x leads to page views or property view of ?…some of you portal guys might colour up this figue.
    At their quoted price of $35.00 per lead.
    Nothing wrong with playing in the Software space probably good businesses ,but all On the house seems to add here is a .com valuation multiple for a software play.
    Great Result for the Owners of Console and Portplus.
    But an implied valuation in the millions for On the house seems not to be a bargain for shareholders.

  • Vic
    Posted April 24, 2011 at 9:09 am 0Likes

    The number of UVs at present is not really an issue to me. This will grow with content and provided a strong brand marketing campaign is undergone from launch the UVs will dramatically improve.

    Rayn’s post here on REA’s data use initiative for later this year will be trumped by onthehouse. They seem to have spent years developing their data base and have a good plan on how they will use it.

    My only issues with this IPO is whether there is 1)enough money to do the brand marketing 2) they have a plan to improve their site functionality and 3).they will appoint a CEO that will drive the initiatives.

    If the leaders of this IPO could publicy throw some light on these issue, I’m sure that the float will be a success and that a model with pay per lead will cream the market.

  • Tatiana Mijalica
    Posted April 24, 2011 at 11:02 am 0Likes

    Poppy, not at all. I did some consulting to Millionplus, their sister site, a few years back and assisted in organising their XML uploads + franchise groups to come onto the site.

    Ben Stockdale, the CEO, is a personal friend and ex colleague.

    Funnily enough, I have never cared much for Thehomepage, as Ben and his team are well aware.

    I am widely known to be

  • snoop
    Posted April 24, 2011 at 3:08 pm 0Likes

    Vic
    As mentioned
    The only cash from the IPO is 5m of borrowed money the rest goes neatly into the vendor groups bank accounts,if i am hearing right from the brokers.
    So cash if any looks to be cashflowed by Console or Rockend.
    One would have to say if its been around 3 years and it hasnt fired in consumer land ,why would it now?
    As for the REIS I struggle as to why they keep trying to spend in this space.
    Its for big well capitalised companies,with cross media distribution horsepower.
    The only portal to have significantly grown traffic according to hitwise is homesales which again has some significant muscle in behind it.

  • Vic
    Posted April 25, 2011 at 8:26 am 0Likes

    John Anon,

    What do you mean when you question Port Plus’s ability to meet a due diligence test?

  • Tatiana Mijalica
    Posted April 25, 2011 at 9:50 am 0Likes

    Snoop, the REI

  • Vic
    Posted April 25, 2011 at 12:46 pm 0Likes

    So, Tatiana,

    Private sales is the way to go?

  • Ryan O'Grady
    Posted April 25, 2011 at 1:12 pm 0Likes

    Bill, I don’t think they are going to that extreme. Agents will always control the listing and manage it. However, I think REA will encourage agents to add vendor details to properties. REA will then market directly to the vendors removing the need for agents to do this.

  • Tatiana Mijalica
    Posted April 25, 2011 at 1:41 pm 0Likes

    Vic, private sales may become more prominent. Why wouldn’t a seller want to sell their own house once they can “value it” themselves?

    Ryan, REA already have potential vendor details from ozhomevalue.com.au and homeguru.com.au.

    Also, the agents will only continue to control and manage the listing if they can in fact get the listing in the first place. And this starts at property appraisal.

  • Ryan O'Grady
    Posted April 25, 2011 at 1:41 pm 0Likes

    From what I read onthehouse have UV of around 150,000 in March and they are forecasting 10% month-on-month growth. I’d be interested in knowing what is driving this traffic is it SEO, advertising, agents, word of mouth?

  • Vic
    Posted April 25, 2011 at 7:55 pm 0Likes

    Ryan,

    I wonder whether those figures include the traffic to portplus and console.

    I find it difficult to accept the figure of 150000 UVs as they do not come up on early pages for google search via most real estate key words and phrases.

  • Lewis Nelson
    Posted April 27, 2011 at 1:52 am 0Likes

    I hope this IPO states that this company has no contractual relationship this content providers (ie agents). This company has no way of ensuring investors that content will continue to be posted on this portal once the agents discover how much they themselves are losing to this company.

    I hope the disclosure statements in this IPO are clear and concise so investors are not fooled into believing this portal can continue to exist in 2012 or 2013 as new internet marketing roll out for agents to market online.

    I hope this disclosure statement reveals the legal protections this portal has taken to protect it’s shareholders from class action lawsuits of sellers who personal data is being posted on this portal without any protections being in place.

    What investor today would be crazy enough to buy into a portal in 2011 assuming online marketing and search engine technology is like it was 2007.

    The portal market changes each day and the massive changes ahead pose no real potential for current portal providers.

  • Joe
    Posted April 29, 2011 at 3:03 pm 0Likes

    Is this a lemon or does it have legs?

  • banking offshore
    Posted April 29, 2011 at 9:26 pm 0Likes

    Within these two areas there are a myriad of methods media and budgeting considerations. Call that prospect or FSBO without folowing the rules and risk a huge fine.

  • Ryan O'Grady
    Ryan O'Grady
    Posted May 10, 2011 at 10:58 am 0Likes

    The IPO is set to launch tomorrow and some more interesting news is that according to an artcile in the AGE today http://www.theaustralian.com.au/australian-it/startups-journey-to-55m-ipo-real-estate-site-will-list-data-free/story-e6frgakx-1226052857881?referrer=email&source=AIT_email_nl&emcmp=Ping&emchn=Newsletter&emlist=Member

    “Onthehouse is also understood to own a small interest in Victorian property valuation company Residex. It is thought that Onthehouse will have the opportunity to exercise an option later this year to increase its holding to 50 per cent and possibly make an offer for the whole company.”

    Means even more sales data!

  • Ryan O'Grady
    Posted June 1, 2011 at 6:33 pm 0Likes

    Onthehouse Update

    onthehouse.com.au – Member Update

    We are very pleased to inform you that the Initial Public Offer (or IPO) of onthehouse.com.au has successfully closed with the full amount of $55 million subscribed for by investors.

    We are also pleased to confirm that we have used part of the IPO funds to complete the acquisition of two leading real estate industry businesses, Console and PortPlus. We welcome current customers of Console and PortPlus to the broader Onthehouse Group and look forward to providing them with the market leading products and services they have become accustomed to combined with new features including enhanced analytics and property content.

    These acquisitions will also help us to achieve our goal of providing our website users with free access to the most accurate, extensive and up-to-date real estate data in Australia.

    For those of you who subscribed for shares in the IPO, we would like to welcome you as shareholders in our company. Our shares will commence trading on ASX on Friday, 3 June 2011 (our ASX code is OTH).

    For any of you thinking about buying onthehouse shares, the brokers to our IPO (RBS Morgans and Wilson HTM) are offering onthehouse website members a special brokerage rate of $25 per order (plus GST) for onthehouse share purchase orders of up to $10,000. This offer is only available up to and including Friday, 10 June 2011.

    To take advantage of this special offer, please contact RBS Morgans (1800 777 946) or Wilson HTM (1300 655 015).

    Please note that you should consider your own personal circumstances and seek financial, taxation, investment or other professional advice before making a decision to invest in shares. This letter is not, and should not be taken to be, investment advice or a recommendation to purchase shares.

    Once again we thank you for your ongoing support.

    Yours faithfully,

    Jim McKerlie – Chairman
    Michael Fredericks – Founder and Managing Director

  • snoop
    Posted June 3, 2011 at 12:46 pm 0Likes

    Midday Friday
    trading under listing price!!
    Clearly the market understands what this is.

  • Ryan O'Grady
    Posted June 3, 2011 at 12:59 pm 0Likes

    Very interesting. Almost a 5% drop in the first hour of trading, though they’ve almost crawled their way back!

  • Bill Burdin
    Posted June 9, 2011 at 1:41 pm 0Likes

    Hit 80 cents today Ouch!!!

  • Ryan O'Grady
    Posted June 15, 2011 at 10:58 am 0Likes

    Interesting article here about Onthehouse http://www.theaustralian.com.au/business/wealth/onthehouse-holdings/story-e6frgac6-1226074004486 the outlook doesn’t appear that smooth.

  • PaulD
    Posted June 15, 2011 at 3:51 pm 0Likes

    Interest Rate rises again. I saw something quoted :– “From November 2007 to November 2010 – that’s 37 months, there were 16 interest rate movements. That’s 1 every 10 weeks.”
    Can someone explain to me how a serious monetary policy can work when it is being changed so frequently ?? Or at least how can you judge that it is making a difference in such a short time frame?

  • Glenn Batten
    Posted June 15, 2011 at 11:09 pm 0Likes

    It broke through 80c today.. If it keeps on dropping this quickly it eventually will attract the attention of REA. I am sure they would like access to over 3000 agents through Console.. its just Portplus and Onthehouse they dont need!.

  • Glenn Batten
    Posted June 29, 2011 at 8:08 am 0Likes

    Wow.. Closed at 60c yesterday and looks to be heading south into the 50c range today. The Market Cap has been slashed and no doubt lots of questions are being asked. You would think the slide has to stop soon. I never understood how the overall strategy could work but console and portplus are still great businesses.

  • Ryan O'Grady
    Posted June 29, 2011 at 9:22 am 0Likes

    We must note though, it was not the best time to be debuting into the stock market as the market has been getting hit.

    Also, all of this discussion about REA sold data and not sending accurate prices does not help support the model OTH have chosen. This could not have come at a worse time (perhaps during the IPO)!

    But the brokers who backed the IPO and the PR company involved with the marketing should be congratulated. For a stock to flop like this they

  • Josh of Brisbane
    Posted August 17, 2011 at 2:03 pm 0Likes

    I hear On The House is being referred to in broking circles as On The Nose – I personally like the company but agree with previous posts that it is an unfortunate case of bad timing with the current state of the market.

  • aq w
    Posted April 12, 2012 at 11:40 pm 0Likes

    http://www.onthehouse.com.au – Unreliable, suspicious data provider.

  • Nadeine Pearson
    Posted July 24, 2014 at 8:07 am 0Likes

    It’s Shocking http://www.onthehouse.com.au is
    Shooting prices right out of the sky – with no full facts, with no official valuations, with no sense.
    This is hell from hell for buyers and owners.

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