Saturday, August 08, 2009
How little Zoopla became No2
Congratulations to Alex Chesterman, Simon Kain, Doug Munro and the team on the acquisition of Property Finder from News International and REA.
Ad spend is continuing to move away from print to the web, consumers are using the aggregating portals more and more - a natural role for the web, presenting all the properties for sale in one place.
However, the business model of the portals started to be threatened as newcomers recognised that if they could aggregate listings of properties for sale, then they could charge agents a price per lead rather than a monthly fee to list their properties.
The snag however is building consumer traffic at affordable cost - something Rightmove (with the help of their original owners, the biggest estate agency groups) did really well.
The big media companies (newspapers in particular) have a serious interest in this space. Property, along with jobs and motors, is a very big revenue category for national, regional and local newspapers.
Thus the considerable investment by News Int, DMGT (Associated, Northcliffe), Guardian Group, Trinity Mirror et al in the space.
Zoopla applied new technology and new thinking to its approach to this market - firstly by recognising that although the day to day money is in the buying and selling of properties, there are only ever about 1m properties for sale in the UK.
The UK consumer is interested in all 27m properties - at one time or another. Owning one is extremely important and the movement in its value, the method of financing it, the potential to release capital from it are all large economic factors.
Enter Zoopla's approach to buidling a large data utility to serve the whole market. A sophisticated and very effective algorithm for valuation, an ability for consumers to enter their own data to ensure the accuracy and a very well designed and functioning site have led to Zoopla building to a number 5 position in terms of unique users in little over 18months.
Zoopla's July traffic: Unique users - just short of 1m, with almost 11m pages viewed!
This has beeen achieved with remarkably little ad spend and has put Zoopla into the position where it could raise £4m earlier this year from Octopus, Atlas having initially raised £1.5m from Atlas, TAG and other LoveFilm alumni.
With the acquisition, together with that of ThinkProperty from GMG, Zoopla.co.uk will take over and integrate the propertyfinder.com and other websites, benefiting from an additional 3 million unique visitors a month and revenues of almost £7 million a year.
The combined group will power property partnerships with UK websites including MSN, Yahoo!, AOL, Guardian, Tiscali, Sky and Virgin amongst others.
The ability of small, nimble players to continue to disrupt evolving markets is once again demonstrated.
But if Zoopla is ultimately to be successful, it will have to continue to innovate and keep its focus on the changing needs of homeowners, home buyers, estate agents and other service providers to this market.