By Stefan Swanepoel
RISMEDIA, April 27, 2007-Last month, we highlighted some of the trends affecting today's home buying and selling consumer as reported in the recently released Swanepoel TRENDS Report. This month, we explore author Stefan Swanepoel's views on the impact of the Internet on our industry. Here, Swanepoel details how technology is changing the real estate business for the long haul.
Uncontrolled Explosion
In 1995 there were 23,500 Web sites of which 4,000 (17%) were real estate related.
According to the Netcraft Web Server Survey in February 2007 there were 108 million distinct Web sites. Academics estimate that approximately 6% of these Web sites are real estate related; approximately 6.5 million. It's no surprise that Google lists real estate as its top search category. So, with a ballpark growth of 80% per year, every year for the last 12 years, it comes as no surprise that real estate is big on the Internet.
The first generation of the Internet is widely accepted to be 1995 – 2004-Web 1.0. Web 1.0 was like going to the library just to get information. In that era the Internet was basically mimicking the traditional business model, merely trying to do it online.
Then in 2005, things changed. The entry of Web 2.0 gave us not only the ability to gain information instantaneously but also the ability to interact with anyone, anywhere at anytime via instant voice, video or messaging. Web 2.0 is all about sharing and collaboration-not just striving to inform but working to "get something done."
The Dynamic Web 2.0
Because of ubiquitous broadband, cheap hardware and open-source software, Web 2.0 has created an entirely new playing field. It provides a wider and much more robust platform for development than its predecessor. It makes access to and the sorting of vast amounts of information much faster and easier.
Yes, the real estate industry as a whole has "accepted" the Internet with most leading and large brokers embracing it to enhance their services. But, it isn't just a one-time concept to accept and embrace. Unfortunately competition in the world of technology doesn't stand still for even a moment; it is constantly moving ahead to the next big thing. Therefore, real estate professionals who are still 1.0 are "so yesterday." They need to seriously upgrade their mindset to 2.0.
Real estate is an information-based service industry. It used to be that real estate brokers and agents were the holders of information and consumers were dependent on them for it. But that has all changed with Web 2.0. Now it's all about the sharing of information and collaboration with others.
Web 2.0 has brought us a deluge of new concepts than could be passing fads, but most likely are not. Many have already been adopted into new real estate business models such as Trulia, Zillow, PropSmart, LiveDeal, Point2 and Oodle. Other large non-industry specific players such as Yahoo!, Craigslist and of course Google are ever present and only time will tell to what extent they will reshape the real estate industry.
The World According to Google
Google is an exceptional company in many respects and it has become the principal of Web 2.0. With every search, Google learns more about the world and what's out there. With every ad click on one of its 150,000 servers, Google adds more revenue to their $10 billion stockpile.
In March 2006 an article in Business Week stated that the Internet, with Google as its leader, is mutating into a radically different beast. It is being driven by ubiquitous broadband, cheap hardware and open-source software.
For example, Google Base is no longer just a search site; it's more like a destination site. The difference is quite significant and the results are remarkable. Search engines are designed to quickly move consumers through to someone else's destination site. Destination sites are designed to keep consumers captive as long as possible, hence more sales time and/or advertising revenue. With its powerful search capability it has been suggested that Google Base may automatically develop into a destination site for every major industry category.
Google Earth exploded into the mainstream during 2006 on Web sites, PDAs and cell-phones. Based on "Keyhole" technology, Google Earth enables users to fly from space to street level views to find geographic information and explore places around the world. It has found itself becoming the foundation for "mashups" all across the Internet.
Mashup
Mashup is a Web site or application that seamlessly combines content from more than one source into an integrated experience. Thus through the combination of different features, previously not commonly found together, new companies are overlaying content from one onto another to create a higher value derivative solution. Examples in real estate would include Trulia that blends mapping with listing data and Zillow, which blends home property evaluations, maps and listing data.
RSS
RSS (Really Simple Syndication) is software that enables Web sites to come to you instead of you going to them. Visit a Web site and subscribe to its "RSS Feed" and as new content is added to that site you get it automatically. This can be helpful when building repeat "organic traffic" by automatically providing people you know with fresh content about your site.
Real-Time Collaboration
There is no question that e-mail did indeed become the "killer app" of the Internet. Early 2006 estimates by the Radicati Group placed the number of e-mails sent per day to be around 171 billion worldwide. However, the fast rise of unwanted spam is increasing the popularity of IM (Instant Messenger), SMS (Short Messaging Systems) and texting.
GPS
In the very near future, every cell phone will know where it is utilizing the GPS. This will provide customers and agents the ability to pull up in front of a house for sale and call up the appropriate data for display on their cell phone. As smart phones continue to emerge as standard equipment, in the very near future new rich media and more voice actuated features will be ideally suited for real estate.
Speech Recognition
Expect significant impact in the advancement of speech recognition in both audio and video. Podzinger is one company that is looking at the ubiquity of the iPod and the rapidly changing uses of the product. It has already developed a process that performs Internet searches of audio and video keywords using speech recognition. For the real estate agent this provides yet another avenue to reach the customer.
Online Valuations
Domania's Home Price Check became the first Web site to offer online valuations in 2000 but it was Zillow's launch in February 2006 that grabbed the media's attention with its free house valuations called "Zestimates." In December 2006, Zillow announced it would be permitting brokers, agents and consumers to directly list their homes on the site, a clear step towards changing the paradigm.
Vertical Search
Born out of the frustration resulting from the fact that general search engines don't often provide enough detailed information, a new type of real estate specific search emerged-the real estate vertical. Trulia is a residential real estate specific search engine that helps consumers find homes for sale, trends, neighborhood insights and other information directly from hundreds of thousands of real estate broker Web sites.
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