Let The Real Estate Mobile APP Wars Begin!

24/09/2012 7:28 am

 

Facebook's 40% plunge from its initial-public-offering price of $38 in May has many asking what happened? It can’t be blamed on the economy as real estate search site Trulia surged 40% above the listing price last week after begining trading on the NYSE on Thursday.

Andrew Bary of Barron’s suggests that the rapid shift in Facebook's user base to mobile platforms—more than half of users now access the site on smartphones and tablets—appears to have caught the company by surprise.  Bary Argues that,

Facebook founder and CEO Mark Zuckerberg must find a way to monetize its mobile traffic because usage on traditional PCs, where the company makes virtually all of its money, is declining in its large and established markets.”

Bary cites Paul Sagawa, who says Facebook's mobile problems go beyond the small screen size. "The paradigm shift to the app model is unequivocally bad for Facebook," he wrote in a recent report. "Facebook is designed to be open all the time, to be visited in the gaps of the day or as a platform in its own right, bridging to a variety of activities related to the social network." The app model, he says, disrupts this approach. Users open a mobile app for a reason and close it as soon as they are finished. "Why use Facebook to play a game, read an article, manage your photos, stream music, or shop," he wrote, "when you can select a specialized app directly." He continues to argue that Apple and Google, which control most mobile operating systems, siphon away some of the revenue from Facebook apps. Sagawa has a fair point.

However, he overlooks the significance of the recent launch of Facebook’s new APP Centre, which seeks to improve social app discovery.

Bary concludes that the app model may favor more specialized sites like Pinterest, and real estate platforms like Trulia, the real estate search site. Unlike Facebook Trulia climbed as much as 44% in its first day on the market last week. Demonstrating investors’ confidence in the platforms business model and future. Their bigger competitor Zillow raised $75 million in an IPO last year, and $147 million in additional capital through a secondary offering of more than 3 million shares.

Like Social Media platforms the online real estate world is experiencing a rapid change to mobile.  In Australia, REA Group chief executive Greg Ellis told AFR last month that he expected most of the real estate advertising company’s traffic would stem from mobile apps within 3 years, rather than its traditional sites.

Downloads for REA’s mobile apps have reached 1.1 million, and 34% of all visits to the site come from mobile devices. No surprises then that REA had a major update to their realestate.com.au App ready to go to support iOS 6 and the new iPhone 5 when they were both released last week. REA’s competitor Domain has identified the change too and has begun a huge marketing campaign to push downloads of the mobile app. The campaign encourages home searchers to “Become A Property Viking” with the Domain mobile app.

Spring means plenty of properties to pillage and plunder. Arm yourself with Domain’s mobile app and charage into battle like a mighty Viking. Create a shortlist of homes you want to raid then view them on your mobile, no matter where you are.”

 

As lame as the campaign and the men crappy costumes running around at night may seem the campaign isn’t far off the mark. Domain is aiming to plug into the notion of gamification, which improves user engagement. The problem for Domain is that the app has not been updated to include any actual gamification features to match the campaign.

Traditional Real estate sites will also have to fight off the threat of new players who specialize in niche areas and do it better than the big players. This will be most apparent in Australia. As Trulia and Zillow are the new kids on the block and in a short period they have sailed in an plundered the US online real estate landscape. Domain and REA will have to continue to fight off the Australian version of Zillow and Trulia, Onthehouse.com.au and others…