Google, Yahoo, MSN, and the other major players in the search industry have certainly taken notice of the arrival of vertical search and have made it clear that they intend to continue their lucrative domination of the search market.
Yahoo has been paying attention. According to this week's Newsweek, it
is launching a major endeavor aimed at the non-technical consumer of digital
equipment. This site will be a series of vertical sites within a vertical site
with special features for consumer groups such as senior citizens and even a
five-minute reality show which will allow visitors to submit their problems
in a contest to be paired with technology experts who will "make-over"
the messy digital areas of their life.
Yahoo, however, has not yet extended its efforts to its real estate search site that, at present, is barely horizontal. The main part of the site seems to contain less information and utility than it did five years ago. Perhaps had we been willing to register with the sponsor - Prudential Real Estate - we could have obtained a full property description but that required filling out all of the information necessary for an agent to contact us - information that may be sold to an agent who would expect or at least hope we were genuine buyers. The Yahoo Classified ads ($49.95 for 21 days) is better but even there only about 60 percent of the ads provided addresses in the towns we searched and of course not every agent or owner wants to put out that kind of money to advertise a property. The only way to make it work is to first do the search and then switch to the classifieds to obtain more information on those properties that are advertised.
Google, however, intends to remain the 500 pound gorilla of search engines as indeed it must to justify and maintain its $400 stock price. It has been widely reported that it was beta testing a vertical real estate site which combined its satellite mapping database with its search capabilities to enable a site which would mark the property location on a map (as well as the locations of "comps" in the area) and enable the user to identify routes to work, area amenities and so forth. Once the buzz about the site started appearing on the blogs the site disappeared but the smart money is betting that it will be rolled out with appropriate fanfare sooner rather than later.
So, assuming that Google's rumored site comes on-line and Yahoo gets its act together, what will be the effect on various market components?
Newspapers are probably not an issue. Real estate newspaper ad linage is already down as agents are diverting money to websites and web advertising. It seems, anecdotally at least, that even television is getting increased attention from large national firms and some companies that assist FSBOs with marketing. Newspapers are far from dead, but they are certainly no longer the only game in town and their influence is likely to continue to diminish.
We have already talked about the advantage some of the new entries in real estate searches would have over older competitors because of the advantages of specialization. But, if these innovators bump up against the sheer weight and money of Yahoo and especially Google, they may not have much of an opportunity to prove themselves. Both of the big companies as well as MSN have already catalogued billions of pages of content and are known and well traveled destinations for consumers; both are valuable assets from which they can build their vertical search capabilities.
But even Google may have to tread lightly. Pay per click and other ads from real estate companies, their affiliated mortgage companies, and individual agents are a huge source of revenue for the company. Any move that is interpreted by these paying customers as interference with the control of their listings or their brand identity, misusing copyrighted information or in any way cutting into their profits could cost Google or Yahoo dearly.
One emerging player - and one with a dog in the fight - is Trulia real estate search. In a recent "white paper" titled The Truth about Real Estate Search" it offered a number of warnings and safeguards to agents and companies entering this brave new world. Trulia suggests a proactive approach. Companies and agents should research vertical search companies and decide if their business models are good or bad for that company or agent, determine what sets one search company apart from another; what the companies' true objectives are, and which are the friends and which are the enemies of the industry of a whole.
Trulia points out those agents with web sites displaying their listings do not have to be at the mercy of these search engines and their "spiders." The technology exists to limit access to all or part of a web site and an informed listing broker can, with the research suggested above, hand pick those companies they wish to allow to partner with them so as to maximize the benefits of the cost and effort that has gone into that website.