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Zillow And The Google Playbook

The Google Story, by David Vise, is a must read for any budding Search Engine entrepreneur.  Vise tells the story of Sergey Brin and Larry Page and their quantum leap technology and dynamic vision that first transformed the world of Internet Search, then the world of Search Ad Marketing.

In reading The Google Story, I was impressed with how closely Zillow follows in Google's footsteps, taking many pages directly from the Google Playbook.  Imitation must be the highest form of flattery for Search Engines too. Zillow's Playbook bears many similarities to Google's.  Picasso said, "Good artists copy. Great artists steal."  This also holds true for Google's business model and Website.

In evaluating the business plan for our Web site, a reviewer for a local Venture Capital firm commented, "Google proved the model (keyword relevant ad sale model) for general search, but can this model work for anything else?  She was most intrigued with Zillow, and wondered how successful it was.  I've tracked Zillow closely ever since.  Come on Zillow.

Google has been successful in its core area of keyword relevant search. But this success has not carried over into other areas where Google hoped to have a decisive impact.  In fact, Google is being handily beaten in 3 areas it hoped to dominate: Blog Search, by Technorati; Internet Video, by YouTube; and Social Networking, by MySpace.  News Corporation bought MySpace, while Google sat on all its hands, its algorithm and its cash. 

It doesn't seem that the Google Algorithm generating Page Rank translates well to Vertical Search, where much of relevance is already dictated.  In blog search, for example, the recency of a post is of a much greater importance than in keyword search.  Dare Google tamper with their algorithm?  Why does Zillow.com, with 2.3 million visitors last month, have a Page Rank of 5; while ZillowBlog.com has a Page Rank of 6?  Might the recency of the blog posts trump the high traffic and the same-o same-o of the parent Web site?  Might little Technorati, with its increased importance of recency, be driving Google, just as Google's algorithm drove those elder statesmen, Yahoo and Microsoft (think Technorati Tags)?  Who's playing catch-up now?

What about Home Search?  Yahoo used to use Google Search, but Yahoo felt it had to develop its own search engine when Google was became too much of a portal, in direct competition with Yahoo.  Now Yahoo uses Zillow to provide much of its home search data.

Microsoft's Playbook has been not to get in on the leading (or bleeding) edge, where start up costs were great for a huge corporation; but to let the small early leaders fight it out, then buy the best. Microsoft thus missed the boat on Internet portals (AOL and Yahoo), and on Search, where it too is playing catch-up.  Now Google seems to be making similiar mistakes with Vertical Search.

Search 1.0 was Alta Vista, Excite, Inktomi, etc.  They featured random search with little concern for the relevance of their findings.  Google heralded Search 2.0 with an algorithm determining relevance, and with ads selected for their relevance.  Enter Yahoo, MSN and Ask from stage left.  Search 3.0 (as predicted by John Battelle in The Search) will feature the powerful Vertical Search Engines: YouTube, Technorati, MySpace and Zillow in the Home Space.  Search 4.0, will come when the big Horizontal Search Engines integrate the Vertical Search Engines.

• Google has the best keyword search.  Zillow has the best home value search.
• Google has the best algorithm for keyword search.  Zillow is developing the best algorithm for home valuation search.
• Google is #1 in the minds of searchers in general.  Zillow will be #1 in the minds of home searchers.
• Google is where searchers go first for their information.  Zillow will be where home searchers go first for their home valuation information.
• Google can link the searcher to the best information.  Zillow can link the home searcher to the best information.
• Google provides excellent general search results, instantly and for free. Zillow provides excellent home valuation results, instantly and for free.
• Google makes money by selling relevant ads around its results.  Zillow makes money by selling relevant ads around it home valuations.
• Google is service first, ads second.  Zillow is service first, ads second.
• Google drove traffic first.  Zillow is driving traffic first.
• Google invests in technology and doesn't advertise.  Zillow invests in technology and doesn't advertise.
• Google's popularity has spread by word of mouth, buzz and devoted users.  Zillow's popularity has spread by word of mouth, buzz and interested users.
• Google has a clear and simple home page, without ads.  Zillow has a clear and simple home page, without ads.
• Google has lots of free and useful stuff (G-mail, Google Maps, Google Toolbar, Froogle, Blogger, Google Analytics, etc), to keep bringing you back(drive traffic).  Zillow has lots of free stuff (Open API, links, sponsors Carnival of Real Estate), to keep you coming back(drive traffic).
• Google has open API's (like Google Maps) you can use on your Website fo free to develop applications and drive traffic.  Zillow has an open API of its service you can use on your Website for free and develop your own application and drive traffic.
• Google is looking to solve the problems of local search, vertical search and personalized search.  Zillow is the answer to local search, vertical search and personalized search.

Even When Zillow Is Wrong, They're Right. A Different Home Search Model

In the Movie Industry, "Any publicity is good publicity."  Anything generating more talk, more buzz and more media coverage, ink and otherwise; is good.  And it's all free.  Just think of those sex tapes of Pam Anderson and Paris Hilton; or almost anything Brittany Spears drops; or does, or doesn't wear.  Bad is the new Good; at least when it come to publicity.

But what does all this have to do with Zillow and Home Search (besides checking out the homes of Pam, Paris and Mrs Federline)?  Hasn't selling houses always been Zillow's real goal?  Isn't Zillow a closet RE/MAX?  Doesn't Zillow have tons of top agents holed up in Seattle, chomping at the bit, ready to go and steal our commissions?  No!  No!  A thousand times, No!  Zillow's goal is to sell advertising, not houses.  If you fear Zillow will become Ziplow Realty, Coldwell Barton, or Z-Lo/MAX; then you should mount your next ad campaign against your local newspaper, too.  Zillow is a media company, not a NRT wannabee.  Your local newspaper is a print media, selling classified ads.  Zillow is an Internet media, selling virtual classified ads.  Can you sell virtual houses?  Yet?  Know! Know!  A thousand times Know!

Media companies drive traffic first. Zillow is driving traffic first.  As much traffic as possible.  Just like Google (think Google-Zillow Model) did and does.  Then Zillow monetizes the traffic by selling Google ads all over their home-search click steam.  Wallah: "Make money the new fashioned way; like Google."   

Google proved the model for Horizontal Search.  Will Zillow prove the model for Vertical Search?  Three Venture Capital firms: PAR Capital (Boston), Benchmark Capital (Ca), and Technology Crossover Venture (Ca), think so; to the tune of $57 million of their post dot-com-bust dollars.  But we still need to wait and see if Zillow can be successful in the Home Search space.  Zillow is the first major test of the Internet ad-sale model for Vertical Search Engines.

But won't Google and the "Me Too" Googles (Yahoo, MSN, AOL and Ask) beat Zillow to the promised land of the Home Search ad space?  Yahoo already subscribes to Zillow's property info.  And, if Google's failures with blog search (Technorati.com), social networking (MySpace.com) and Internet video (YouTube) are any indication; Zillow will have the best opportunity to be #1 in selling the advertising on people's most valuable asset.  Google may have to settle for an ad piece of Zillow's Home Search pie.

Who would want to be the next HSA, RE/MAX or Prudential of Real Estate; when tey could be the first Google of Home Search?  Competition?  What Competition?  There is little competition in the Ad-Sale Home Search Market.  Are any of Zillow's VC's putting their millions into Next Realty, Zip Realty, NRT or any of the other Real Estate Brokerages?  How are these Real Estate stocks doing in this higher interest rate market?  Did you get out on time?

In Real Estate 2.0, the most valuable property will be the Real Estate in the hearts and minds of home buyers and sellers; and the Web Real Estate around the pictures, maps and info of every home in the US.  Guess where Zillow is?

By offering Google-like search, Google-like results, at a Google-like price, free ; Zillow will become the top-of-the-mind Web site for every home seller wanting to find out the first approximation of their homes' value. Think: Driving Traffic.  Whether Zillow's Zestimate is right or wrong, is not the issue.  Think: Driving Traffic.  Zillow is first in their minds.  Zillow has the prime Real Estate. Zillow has the high ground.  Zillow has the "A" Office Space. 

Zillow drives traffic first.  Zillow provides all their data, one click, in seconds, interactive, on the Web; and free.  How long did it take to do your last CMA?  Do you do CMA's for everyone?  Did you want or get their email address or their phone number?  Just read your own newspaper ads and flyers, and see if you did.

Zillow had 2.3 million visitors last month, doing at least that many Zestimates.  There were 1.1 million Realtors and 2.3 million licensed agents in 2005.  How many CMA's did they do?  How many hours did it take?  "I'll get back to you in a few hours."  "Sign the contract."

But what's in Zillow's home search for Realtors?  A lot.  Soon we'll be able to advertise on our own listings and target our advertising to any or all home listings by location, price or feature. 

What's in it for Zillow?  A lot.  They have the ideal tool to sell ads to Realtors, Lenders and Lawyers.  And if Zillow can work out a strategy to bring home buyers and sellers back, after they sign the purchase contract, after they close and after they move in; Zillow can sell ads to all the other home-sale-related businesses and to all the new-home-owner related businesses.  Then Zillow will stop selling ads, recruit a bunch of agents, and start selling houses?  Because that's what we say they will do?

As Realtors, we can cooperate with Zillow, share our data; and laser target advertise on the most powerful media for Real Estate sales.  Our cooperation with Zillow will open up our listings to all the Search Engines.  Doesn't the due diligence of our agency to our clients, home sellers, dictate we expose their listings to the most markets possible?  Even if that exposure is free? 

When will sellers demand that we Realtors act like the professionals we say we are?  When will sellers demand we do our due diligence and open up their data?  We work with Zillow and the other Search Engines, and we'll both benefit.  We can also try to take our data and go home.  If we hide our data, openness will be forced on us; by Zillow, by the other search Engines, and by our good friends at the Department of Justice.  Let's make our choice on our terms, while we still have a choice.

What Hath Google Wrought For Real Estate Search?

Marshal McLuhan said "The Media is the Message."  His grandson might well say "Google is the Message."  We've gone from "You are what you eat" to "You are what you find" to "You are what you search."  Over 75% of all Internet uses start with a search.   Almost 75% of all home searches start with the Internet.  Google defines our search expectations in every way: what we search for, what we find, how we find it, how we use it and what you pay for it.  But Google has problems.  General search can only be so specific.  Google's algorithm scales big well, but so far has not scaled small well.  Google's good news may be 3 million links in a second, but its bad news is 3 million links in a second, too.  Much of the Web, like most Real Estate listings, is hidden from Google and is part of the Invisible Web.

Google's media business model has driven the Internet portals of AOL, Yahoo! and MSN to abandon their subscription models and adapt the ad-sale model.  But Google hasn't driven Real Estate Search much, until now.  Zillow is the first major test of the ad-sale model to Real Estate.  Google has proven the model for general search, but it remains to be seen if the model will work in Vertical search.

Google drove traffic first.  Zillow is driving traffic first.  Google provides valuable free data and sells ads around the results.  Zillow provides valuable information to home buyers and sellers and sells ads around the results.  Google doesn't have to advertise.  Zillow doesn't have to advertise.

Google has taught us what to expect in a Real Estate Search Engine: where to look, how to look, what we'll find, what it will cost. Will home buyers and sellers settle for a clunky, limited Web site?  Will they tolerate a hard sell?  Will they give their names, addresses, telephone numbers and email addresses to an unknown Realtor when they can get the same information for free?

What if Zillow provides Realtors with a free upload and ad pages on their site?  What if, with one click, we could send our listings to Zillow (hence to all the search engines), to our MLS and to Realtor.com?  The MLZ is free, the MLS isn't.  We'll have to advertise on Zillow, just as we advertise in print media now.  The Internet is 24/7, interactive, has 100% of the homes for sale and allows you to target your ads down to the individual home.

My broker told us to tell prospective sellers that their homes would be advertised on at least 10 Internet sites: my site, my brokers site, the firms regional site, our national site, the local MLS site, Realtor.com, TheRealEstateBook.com, HarmonHomes.com, and the local broker sites carrying the MLS listings.  But what if I could tell the prospective seller, "Your home will be advertised on Google, Yahoo!, MSN, Ask and Zillow?"

Google (v.t.) changed forever the way we searched for information.  Zillow (v.t.) will change forever the way we search for home buying and selling information.

Zillow-Google Model

When I wrote my post of 7/16/06 for the Real Estate Blog Carnival I titled it the "Google-Zillow Model".  I noted how Google delivers free search results and sells ads around the results.  Zillow uses a similar model delivering free home data including street address, tax assessment, maps, value estimate (Zestimate) - (no reference yet in the Wikipedia) and sells ads around the data.  Zillow had already made a deal with (#1) Google to use their best ad service.  Zillow had already made a deal with (#3) MSN to provide the best aerial pictures from Pictometry.  Yesterday, 7/18/06, Zillow made a deal with (#2) Yahoo to provide their searchers with quick access to home values.  Yahoo! sites registered 5.6 billion search queries in the second quarter according to comScore Networks.  Yahoo.com is the 2nd most visited Web site after MySpace.com of NewsCorp. 

Last week Zillow added a home financing section with home loan quotes available from Lending Tree [of Barry Diller's InterActive Corp,IAC, home of Search Engine #5, Ask.com] and  mortgage rates from Bankrate.  My only question is, Where is the deal with Search Engine #4, AOL?  Last week Ask.com. This week Yahoo.com.  What's next?  The Google-Zillow Model has become the Zillow-Google Model.   

Dick Kaplan, CEO of Pictometry, after their deal with Microsoft was asked, Why didn't Microsoft  buy Pictometry?  Kaplan replied, "They offered, but they couldn't afford us."  The same may soon be true for Zillow.  The question may not be, Who will buy Zillow; but, Who will Zillow buy?  With all their Zestimates, Zindexes and Zilloans; Zillow has taken over "All that is 'Z'", just like Google took over "All that is 'G'".  Maybe the Realtors are justified in their paranoia.  Zillow isn't just for cocktail parties anymore.  Google may have beaten Zillow to verbdom (to Google something); but soon there will be a new search verb, to Zillow a home, meaning to look up the home's value on the Internet.  How much is a Zillion dollars anyway?

Technorati Tags: AOL, Ask.com, Bankrate, Barry Diller, Blog Carnival, comScore Networks, Google, Dick Kaplan, IAC, InterActive Corp, Lending Tree, MSN, Microsoft, MySpace.com, NewsCorp, Pictometry, Real Estate Blog Carnival, Wikipedia, Yahoo!, Yahoo.com, Zestimate, ,Zillow, Zindex.

Google-Zillow Model for Real Estate

Can the media business model, "free content - sell ads", used to great success by network TV, radio and now Google, work well for Zillow in Real Estate?  Zillow's other model is Expedia, which drove traffic first then drove revenue.  Zillow has certainly driven traffic, being steadily in the top 10 of Real Estate sites since its beta start in 2/06.  But can Zillow make money?  If paranoia in the Real Estate Industry is any gage, Zillow should make a ton of money.  Brokers and agents fear Zillow will become Real Estate's next NRT, Home Services or REMAX when, by all appearances, Zillow will become Real Estate's first Google.  Zillow already has Google ads and Pictometry pictures through Microsoft.  Check out Zillow's organic Search Engine rankings, with no advertising budget.  What will happen when someone invents a mash-down, combining Zillow street address Web pages with both lists of the homes for sale in an area and targeted Google ads?  Any home-sale related company could advertise on any or all of the homes for sale in their market by location, price or feature, down to the individual home.

Google, Yahoo and MSN have been struggling with issues of Local Search, Vertical Search, Geo-coding and Tagged (Semantic) Search for years.  Zillow will soon have a Web page tagged to the street address of every residence in the United States.  A business, local or national, can now advertise on a Web page next to the street address, tax assessment, value estimate (Zestimate), schematic map, aerial map, integrated map, and neighborhood assessments of any home or Zip Code (90210).  (Great for targeted Real Estate advertising.)  How soon before Google and the Google wannabees see Zillow can offer a potential solution to their Local Search and other problems?  I like the 2 Venture Capital firms, Benchmark and Technology Crossover Ventures, which put $32 million of their post dotcom-bust bucks into Zillow.  By joining Zillow they could make Zillions.