Google Real Estate: Time to Be a Portal

As Battelle and several IO readers have noted, Google has quietly launched a real-estate search service, which appears to be driven by Google Base.  (Search for "real estate" in the main box and then narrow down the search).  When the search is narrow enough, the results pages combine listings and annotated maps, which is nice.  Once again, Google has taken a seemingly obvious and customer-friendly step that specialists like Homestore have failed to take for years.

Google's service appears to be driven by Google Base (listings in a Connecticut area I know well were submitted by homesandland.com).  As a result, at least in the area I searched, the service contains only a small fraction of the properties available.  In other words, thus far, Google does not seem to be searching or scaping local real estate sites or the MLS listing services.  Until it does so, it will not become a serious place to search for real estate, no matter how cool the interface is.

Real estate search creates the opportunity to eventually generate billions of dollars of advertising, referral, and transaction revenue, from agents, mortgage brokers, movers, lawyers, and others.   Real-estate is very much a local business, however, and until Google is able to present all of the listings in a given area, its real estate service will be yet another promising but under-developed sideline.  Given the difficulty that Homestore, Yahoo, MSN and other companies have had assembling comprehensive national listings, building a good local real-estate search capability is probably not something that can be accomplished by waiting for local agents to enter data into Google Base.  Rather, it will probably take a dedicated team of editors, salespeople, and engineers focused on building a dedicated real estate business.

The bottom line is that, in real estate, as in many other categories (including Finance), Google has demonstrated that it has the right stuff necessary to take on and beat incumbents.  It is doubtful, however, that it has enough right stuff to beat incumbents while pretending that this is the last thing it wants to do. 

Both Google Finance and Google Real Estate would benefit from having an easy-to-find, easy-to-use section welcome page, like those found on Yahoo! Finance.  Both would benefit from having links on Google's front page.  Adding sections and links, of course, would force Google to publicly abandon the already ludicrous claim that it has no interest in becoming a portal.  But it would be better for users and shareholders alike.

Comments

[King Troll]

Henry, if all you talk about is Google then why not just call yourself the googleoutsider. I get my Google news from your site and fuckedgoogle.com.

However, I would prefer you started to write about other INTERNET stocks. Let's not just focus on what google is doing. What happened to companies like Amazon, Cisco , Juniper...

[Still Inside]

Once again, this direction does not sound like Search. Once again, GOOG is playing the role of the one trick pony refusing to do its one trick.

Does anybody in the world think they will be anything but a smoking crater if they lose the battle in core Search?

These kinds of moves are the ones you make when you've absolutely dominated your core market and there's almost no chance for any serious competition in the short to medium term (MSFT, CSCO, INTC, etc.).

In other words, GOOG is playing this like they've already won the "Great Search Wars of 2006-2009", and they are on to the next battle. The problem is that it's 2006, not 2009.

SI

[Jared Lansky]

"If you build it they will come"

[King Troll]

Still Inside, your a flaming retard that doesnt know shit. Google owns the Internet. Search is a game of children. Time to move on.

[googooforcocopuffs]

So now google is trying to become a real estate broker?

It is perfectly clear that Google is going down a list of every internet-based business that has ever existed, and slapping together a half-assed beta copy of every single on of those businesses.

You have to remember- the point isnt to actually make a profit with all these new ventures.

The point is to keep wall street and main street buzzing with excitement that MAYBE all of these new ventures MIGHT make tons of money down the road- thus keeping the stock price high and thus allowing the insiders to continue selling approximately 1.5 billion dollars of stock per month- the highest of any dot.com in history.

THAT is the only reason for all these new ventures. To keep the stock pumped and to let insiders unload at the highest possible price.

Anyone who thinks otherwise- well, i've got a bridge in brooklyn you might be interested in.

[rick]

My $.02:

Local real estate continues to be an amazingly inefficient market because of the closed nature of real estate data. As long as the MLS is "locked up", then the real estate agents can continue to charge a high fee for their (lack of) services.

MLS data is available to the public via broker's sites - however, it is only available via a search query and doesn't appear on a static webpage. As long as Google can only query static webpages, the MLS data is basically invisible to Google's search bots.

The only way Google is going to get the MLS data is if the local MLSes open to Google's search or brokers start making static pages with their listings.

Even if local MLSes are 'opened up' to Google... each local broker chapter stores their MLS data in woefully inadequate/old fashioned standards. It would be a large project to come up with a national search.

So basically the realtors can sleep well at night and continue to drive around in their BMW 735s.

[Walter]

Good questions, Still Inside.

IMO it goes right back to why and how people choose their search engine. If Yahoo had as decent search engine I might dump my Google tool bar - (I do like the spell check feature though).
As search engines become more homogeneous how will Google maintain its search dominance?
If web portals have homogeneous embedded search capabilities Google's market share should/will decline.

Henry hit it on the head; its ludicrous for Google to pretend it isn't trying to become a web portal. What is the point of Google Finance!

[Neal Lachman]

SI , You are right. GOOG has yet again proved its attention span to be "zero" focus, and its vision not grounded in realism. This one-trick pony is bored of its own lil tricks.

Rick, the MLS kind of data will really become a problem for any RE portal. This won't be easy -likely impossible- to compete for anyone. Unless Google teams up with the RE agents. It can be done, however, but the revenue sharing may be unattractive for Goog to make it worthwhile.

[Market Participant]

If Google had the discipline, having a unified national MLS would be enormously profitable, and Google does have the capital to make it so. Something like Realtor.com only more slick.

But, that's not GOOG's core business which is selling tiny text ads. The quality and relevance of any new Google project can be evaluated on the strict criteria of will it help Google sell more tiny text ads. Yes/No?

Market Participant

[John Brosco]

Blodgett,

Why are you suddenly a cheerleader for google? Who is lining your pockets to pump thid POS now? You sure have done a 180 as of late.

[TallTroll]

>> Still Inside, your a flaming retard that doesnt know shit. Google owns the Internet. Search is a game of children. Time to move on.

>> Google owns the Internet

*snigger*, remember AltaVista? They owned the Internet too. MSN is prepping for a big comeback. Their search sucks now, but that's because they neglected it for too long, and they are coming up from a standing start. All they are missing is temporal data : they don't have a good graph of the www with respect to time, which is a critical component of Googles' current algo. In 12 - 18 months they should be able to push their relevancy to comparable levels with the other majors, and then we'll see if they can start sucking in the searchers, and more to the point converting them.

>> Search is a game of children.

*double snigger* Is that why all the best talent on the web works there, one way or another?

[Robert]

Bottom Line:

goog, the stock, has had its pullback and gave us all a
chance to buy it in the 330's two weeks ago.
btw, goog is 410 now.
the insiders have been selling since
the stock was 185. we "dummies" have been able to
purchase all the stock we wanted at 100, if not on the IPO
at 85 just 19 months ago.
I have repeated ad nauseum to all you naysayers that
Google, the company, has the assets to try what they want
in or out of beta. How can any of you mavens predict what
Google, the company, will look like in 1, 2, 5 or 10 years.
If GM can survive for decades on lousy cars, can you imagine
what Google can do with their capital.
Close your eyes. Buy the stock. Listen to Henry.
Get sincerely rich with goog. And stop being so darn negative.
Can any of you seriously say that goog or Google has disappointed
investors. After all, this blog and our interest in goog is
all about making money for ourselves.
Try some common sense......sometimes.

[Walter]

robert.
If you think goog stock is undervalued then by all means buy them. But to disparage everyone who doesn't share your OPINION as lacking common sense is indicative of your intelligence or lack thereof!
Especially in light of your complete failure to provide analytical basis or projections.

"Can any of you seriously say that goog or Google has disappointed investors."

More than seriously, I say absolutely those who bought goog higher 2 months ago are disappointed. DOINK

" How can any of you mavens predict what Google, the company, will look like in 1, 2, 5 or 10 years."

Isn't that exactly what you are doing with your "Get sincerely rich with goog." Yet I've hadn't noted anyone else making the predictions you claim. Can you back up any of your claims?

[GoogleIsFarFromInvincible]

The Google bulls are back with their bravado. Psychology 101. Like rats in a maze. In a bull market, investors are rewarded with buying on dips. Just like Pavlov's dog, they are conditioned to their foolishness with rewards of stocks that recover on the next momentum cycle. They speak of a brave new world. Of companies that will trancend any economic problems because this one is different. It's a real game changer. Nothing like it has ever been seen before. And, maybe in five or ten years Google will still be a major player. Maybe they will have grown revenues 25x to $100 billion dollars as the CEO or CFO discussed with so much braggadocio. But, in the interim or worse all parties come to an end. Ask Henry.

Ask Alan Greenspan who was quoted in 2000 as saying America had reached a new level of productivity and he saw no reason for it to end along with the equity market moves. Pax Americana. Oops, just a mild recession. One of the shortest on record. But we did get a small market correction too. 95%+ correction in Yahoo.

Now, it isn't fair to compare Google to Amazon nor is is fair to compare it to Yahoo's valuation pre-bubble. But, valuing a very small company, and yes a few billion here or there is not large by any stretch, with a single revenue stream and hundreds of billions of dollars globally gunning against it when it is trading at, what? 20x sales? is a tad risky in a market that has gone the longest of any market in over 100 years without a significant correction.

So, for those use use the very sophisitcated multiplication button on their $1.99 calculator to project earnings through what could be a recession or earnings recession at the least is might ballsy.

Ask Yahoo what happened to their earnings and valuation in the last market correction. $120 bucks to $4 bucks.

[GTKdoug]

It seems that we are experiencing groundhog day except that the star is not Bill Murray. Google is all that anyone talks about these days. I'm sure there are other companies doing interesting things, or maybe not? Sorry, had to start with that.

Realtors better take a look at what happened to travel agents when the airlines took their act online eventually settling on sites like Orbitz. Does anyone really plan a trip or purchase tickets and book hotels using a travel agent anymore? Why would I want to part with $50 -60K to sell a million dollar property when all I really need is a combination of exposure, which the Internet can provide, and a sales person who could work for an agreed flat fee to show my property?

[shinkdew]

Comparing Google to GM is hilarious. The barriers to entry in search are very low, the barriers to entry in the auto industry are pretty high. Sooner or later another company is going to find a better way. Everyone at one point in time thought Microsoft and Yahoo and AOL were all invinsible too.

I kind of agree with an earlier post which said Google releases all of these betas to give Wall Street something to talk about. Could you imagine if Google didn't introduce any new products? It gives them the appearance of innovating, even if they are just linking content from other sites.

[Robert]

Walter,
Please check back on these pages a couple of weeks ago and
you will find my similar opinion when goog was in the 330's.
I love the market, because for every anon, or Walter or
MrFuckedgoogle, there are good stock pickers. One does not
be a stock analyst or professional investor "with back-up" to
make money on Wall Street.
But then again, without you and others, Walter,
there would be no goog for sale.

[Jimmy]

Robert,
have you ever even heard of a P/E ratio?
Do you know how many years the internet bubble lasted before the bears were ultimately right?
Do you understand that google has the 17th biggest market capitalization and yet is in the 300s in terms of revenue?
Do you watch Jim Cramer?

[Robert]

Jimmy,

Goldman Sachs analyst Anthony Noto has Google
earning $8.87 this year and $11.85 in 2007.
That is about 34 eps in 2007.

Cramer? Is he the guy who 2 weeks ago, when the
stock was 335, said in response to a lightning round query....
30 up or 30 down.....or 300 to 360. Today the stock is 412.
Guess Cramer was wrong. Again.

Henry has written recently that he expects Google
to have a good first quarter or they would not have
had that secondary offering last Friday at 390.

You are right about common sense. It is the price
of the stock that counts and it is 412. And what in the
world does market capitalization have to do with anything.
It is about earnings now and prospects for the future.

And shinkdew.....the barrier to search may be small, but
Google keeps increasing their market share. Ask Yahoo
how easy it is to beat Google. Oh, we are still waiting
for Microsoft. Uh huh.

[Jimmy]

im an anti-Cramer so at least we agree on that.

there are alot of possible reasons why goog might not reach those earnings targets.
1. the click through rate on ads could decline (i beleive henry has pointed out banner ads and email solicitations had high rates of conversions early and they fell off a cliff).
2. goog's expenses are growing extremely fast and they have not really shown that much success in other product development.
3. the search market is not growing as fast as it use to be.
4. there is some click fraud in my opinion. even if it only extremely small it does exist on some level in the Adsense product.

Just my opinion but i expect one of these issues to derail this stock.

[Neal Lachman]

Common sense is not so common.

[jimmy]

Markey cap is everything, Bobby.
Essentially if your buying goog you are saying the business is worth 120 billion.
More than double Disney. 60 percent more than time warner.

You need some remedial finance, help.

[Chetan]

Check out Zillow.com to know price of every home in your neighborhood.

[P-]

"It is doubtful, however, that it has enough right stuff to beat incumbents while pretending that this is the last thing it wants to do."

... Oh Common Henry. Relax, it's still a work in progress.

P-

[King Troll]

Hey I just checked out zillow.com Man that tools is HOT! Wow why cant yahoo or google launch that?