The takeover of propertyfinder.co.uk by CGNU's property website
Asserta Home - the fourth website purchase this year by Asserta
- is part of a trend which could see property sales on the Internet
becoming increasingly dominated by a small number of major players
to the detriment of smaller independent estate agencies.
According
to Guy Baker, Managing Director of property portal Homes-on-line.com,
the next three years will see the number of property websites
contract as many sites spending multi-million pound sums on
website maintenance, advertising, office space and employees
fail to deliver investment returns and their backers pull the
plug. Meanwhile, smaller estate agencies which have been lured
onto the sites of the remaining bigger players by attractive
low fees will suddenly find themselves trapped as the site owners
rack up their rates having gained a stranglehold on the market.
Although
the privately owned Homes-on-line is a large player in terms
of website traffic, estate agency members and its product offering,
unlike other websites it does not spend heavily on promotion
and so remains profitable - something which Guy Baker believes
is more important to the long-term viability of a website than
size.
He said: "The Internet is still like the Wild West in the
1800s as property sites try to stake their claim on an ever
increasing share of the territory. Unfortunately, smaller estate
agencies currently enjoying 'Jam Today' could find themselves
paying heavily for it in the future, unless they avoid getting
tied in to one or two big players. They need to spread themselves
across several different sites to gain the best of all worlds,
both now and in the future. By remaining flexible now they will
increase their bargaining power when the prices start heading
north after the market shake-out is complete."
He
added: "Homes-on-line has become well established by remaining
lean and not spending huge sums on advertising and promotion.
This has enabled us to remain profitable which in turn has helped
us to concentrate on delivering more services and value to agents.
"We
may not have the same branding and some of the other major sites
but we share the same traffic figures because we have excellent
search engine positioning. This helps us to generate about 10,000
unique visitors a day. I like to think that at everything else
we are better - we make a profit, have no axe to grind and through
our growing links with other estate agency organisations and
property-related media are ideally positioned to serve our agents,"
he said.
Guy
Baker also warned that the picture could be further compicated
by the fact that many of the larger sites have other interests
in the market. Asserta also owns the corporate estate agent
Your Move; Fish is backed by the local property Press who have
the current strangle hold on their market; RightMove is backed
by a group of corporate estate agents including Halifax, Countrywide
Assured, Bairstow Eves and others; whilst PrimeLocation is backed
largely by Savills.
"Paying
these sites will mean giving money to your competitors,"
said Guy Baker. "However, the more important factor is
strategic. By being beholden to the competition, smaller independents
could not only find themselves being hauled over a barrel financially,
but could have their marketing constricted by the big players
once they gain a stranglehold on the market."
He added: "Most of the high-profile major players are making
huge losses at the moment, so will either have to shut up shop
or find a way to develop income streams from their sites. The
E-commerce and on-line advertising dream has not delivered,
which is why so many dotcoms are going out of business. if these
sites can't get the money from the consumer they will have to
get it from the agents on their sites."
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