In a market space where it’s usually winner takes all, marketing company Market Leader is positioning itself to take on Trulia with two recent acquisitions, ActiveRain and RealEstate.
As the launch deadline approaches, the team at RealEstate.com has been redoubling its efforts to target uninterested ActiveRain members. It’s quite telling that the launch date has been pushed by into late March. I guess few real estate professionals are gullible enough to front the money to help Market Leader pay for the develop of RealEstate just so that they can later be charged $500 a month.
From my prior experience in private equity, I’ve seen time and again that success is all in the execution. There is a definite vision at Market Leader in taking on Trulia, but several key elements are still missing. Meanwhile, Market Leader’s stock continues into its eighth year trading near its lows. I’ll be watching to see if they can pull off this strategy.
UPDATE (March 8, 2012): The redesigned RealEstate.com has just launched. It’s much improved in that it’s a cleaner design. Feature-wise it doesn’t seem much different. Unlike Trulia’s cheaper crowdsourced model, RealEstate.com has a pricey walled-garden approach.
So far, they’re still having difficulty getting broker agents and salespersons to pony up the stiff monthly fees to join an unproven service. Even the RealEstate.com sales agent admits it’s a very risky proposition to sign up with them right now. I found that bit of honesty rather surprising.
For their pricing model, it’s entirely based on the potential size of the market, not on actual traffic delivered. So, if you signed up for a city like Palo Alto, where prices are notoriously high but turn-over is low, you’d still be charged a lot, even if RealEstate.com doesn’t deliver a single lead.
At the moment, they’re still offering plenty of cities for $79-$499/month with many of the prime cities still unspoken for. They don’t have any metrics on what kind of traffic you’ll be getting, just their word that “it’s a lot”, since the RealEstate.com domain name is preferentially placed in search results for “real estate”. Market Leader (LEDR) claims that RealEstate.com had 1M visitors a month when they bought it last year. But, compared to sites like Trulia and Zillow, that seems to be a drop in the bucket, at best.
Still, LEDR has been doing very well in the past month, going up by over 40%. Apparently, there are real believers who can stomach the continued hemorrhaging of cash at the company.
UPDATE (August 2013): MarketLeader really hit hard times as it got swallowed up by Trulia.