EBay and Yahoo! Get Realty Bug
March 6, 2002
Inman News Features
Microsoft and HomeStore for many years seemed to be the unstoppable leaders in online real estate. But as these companies suffered missteps, two other Internet giants?eBay and Yahoo!?began investing in the online real estate category and hunting for the elusive payoff.
EBay and Yahoo! are hiring people into their real estate units, forming new partnerships and elevating the real estate opportunity into the executive suite.
This week Yahoo! gave real estate the coveted top spot on its home page, a sacred position awarded only to vertical markets the company is serious about pursuing.
But Yahoo! and eBay aren?t the first powerful brands that have tried to untangle the gnarly real estate opportunity. Merrill Lynch, IBM and others have had their toes in the real estate waters in the past with little success. Today the major banks are eyeing the $60 billion paid yearly in real estate commissions and asking "Why not us?"
Indeed, Yahoo! and eBay are entering the industry at a time of blunders, miscues and no shortage of hubris. Dozens of real estate Internet startups have failed and many attempts by the traditional industry to capitalize on the Web have flopped. The landscape is littered with dead domain names and dysfunctional real estate software.
Microsoft and HomeStore offer some lessons for mighty companies that think real estate is simple.
In 1995, real estate managers of Microsoft?s new business unit?then dubbed Boardwalk and later called HomeAdvsior?met with HomeStore executives to search for ways to work together. The meetings reportedly dissolved in acrimony and both companies began independently to invest heavily in online real estate, competing with each other at every turn.
It appeared for a time that HomeStore would be the winner as HomeAdvisor changed management, dumped its mortgage enterprise and looked for a new business model. The real estate effort was folded into MSN and remains a leader in traffic, reputation and the quality of its consumer experience. But the software titan also has been humbled by the difficulty of the business.
Homestore could suffer a much more colossal demise. The company has lost more than 90 percent of its stock value, faces delisting from Nasdaq and has become mired in accounting miscalculations.
Enter eBay and Yahoo! Both companies are recruiting industry and Internet personnel. Giles Cassels left Homes.com and Homes and Land to join Doug Galen at eBay. Galen has a master?s degree in business administration in real estate from the University of California, Berkeley, and is a respected industry leader, who not long ago was a vice president at online lender E-Loan.
Rob Beck is running the Yahoo! real estate group. Beck came to Yahoo! from Move.com, a Cendant property sold to HomeStore. Those who work with him have praised his methodical approach to executing Yahoo!?s real estate strategy.
Both companies are partnering with others, including eRealty, HomeGain and online lenders, and Ebay has made one acquisition.
Both companies have learned lessons from their past mistakes. They are launching products carefully, testing them and expanding regionally.
EBay initially is shying away from the mainstream real estate transaction, instead picking up market share in such fringe areas as land sales, timeshares and lender-owned real estate. Yahoo! has launched listings, but only in a handful of markets.
Clearly there is less hubris, but no shortage of commitment.
Copyright: Inman News Service