UK online real estate: show me the money

There is a buzz in the UK market around the new startups (Extate, Zoomf, Nestoria, OnOneMap and others) that are leveraging mashups to provide higher value added services in property (or real estate for the Us readers).  Property is the #1 topic of conversation in London and most Brits are obsessed with the value of their property (yes, that would include me).

The content sources are well know and available to all, e.g.:

So set up some basic spidering and off you go, you can create a Web2 real estate service.  For example I now know that my neighbout did hit the target price on his house :-)

I am glad to see the next wave of innovation in this space; God knows it’s needed.  As an example the only company that seems to be doing any SEO/SEM is PrimeLocation.

But for most of these services, I don’t understand where the big money is

Some of the mashup companies that I have met are metaservices: they are relying on other people’s listings and hoping to capitalise on high value CPC as the agents and sites fight for qualified traffic. But RightMove won’t let you spider (with 30% of the listings inaccessible, that’s a problem) and guys like Fish4 are supposedly as low as 30p per click.  I don’t see how you build an attractive business without capturing more of the value.  The metrics just do not support it in my view.

Most of the startups are well aware of this so they have started to do more than spidering the portals but rather are extracting additional information directly from the agents’ site (wether parsing or using feeds) and therefore disintermediating the portals.  Here the aggregation value is in building a slicker interface (no doubt price sliders a la Kayak are around the corner).  The proposition makes plenty of sense for travel which is used to paying referral fees and is a fantastic repeat business with multiple providers offering essentially fungible goods (flights from A to B) and fighting for the same customer.  The same does not seem to apply to real estate which involves unique goods traded once only.  You have the double challenge of driving enough volume to reach critical mass and getting agents used to paying for link placement or search terms.

The UK is a market that is fully intermediated (90% goes through agents), unlike say France.  If you are after the listing fees, attacking the world of the agents is hard workNic says many agents are tired of paying the high listing fees demanded by the likes of RightMove.  That may be, but right now I don’t see enough of them moving shop without a sales call from a qualified rep and some convincing numbers to boot.  I am not sure a free listings offering would be enough on its own to make a real dent in the market leaders either.

At Atlas we are still looking hard for the right opportunity in this space, one that can prove both disruptive but also sustainable and become the next gen leader.  Vecosys annouced Zoomf’s funding recently and I am sure others are in the works (it does not take much to run a "pure mashup" so many companies may well remain non-venture funded); Extate also took some funding.  I for one am not sure we have seen that company emerge yet.  FWIW Extate is my current favourite (award for best interface and what awards to be the best extraction backend, apparently all crawl and parse).  I see that Saul also feels this way.

One of these new companies has a shot at creating enough traffic momentum to gain in the foothold in the agent listing business or at creating a nice but small sustainable CPC business in vertical search.  But where is the next gorilla ?

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