CoStar Cold Start

 So CoStar is now taking on the property portal market leaders in three of the world’s toughest competitive environments – the US, UK and Australia.

In the States, it is claming to be making headway and to have become the number two with its portal Homes.com. In the UK, it’s arm-wrestling Zoopla for that second spot with its brand OnTheMarket (OTM) whilst in Australia it’s just acquiring Domain, definitely the number two over there.

I have always wished competitor portals to the dominant, monopolistic players well. I have helped set up a couple in my time and think that agents desperately need alternatives. So my excitement at CoStar’s entry into the residential market – with all of their billions – was real.

But now I’m worried. Because it’s been 18 months since OTM was taken over and Zoopla remains in CoStar’s way before it can even land a punch on Rightmove. In the States there is much PR flak thrown around but Zillow maintains its primacy by quite some distance. And Down Under, REA Group has more to fear from competition authorities at the moment – they’re under investigation for inflating charges to homeowners to access premium products – than they are likely to have from Domain in the near future.

And that’s because, I’m afraid, it’s possible that CoStar has spread themselves too thin.

They will have great people in every territory – I’m a big fan of Jason Tebb over here, who talked passionately about his mission to help agents at June’s Property Academy sessions across the country – but it’s hard enough to get a strategy right to topple one market leader, let alone trying to topple three at the same time.

In the biggest markets out there.

When the dominant ones have a hyper-localised war chest to defend themselves.

I’m hoping for something brilliant to come out of CoStar Towers that instantly shows why these three markets are the ones chosen, together, right now. The investigative journos at the brilliant OnlineMarketplaces have discovered that CoStar has acquired homes.com.au, so presumably are looking to change Domain’s (ahem) domain and name soon. That is GOOD.

They should have done that instantly with OnTheMarket, to homes.com/uk, so that all of the marketing dollars they’ve spent in 2024 weren’t invested in the OTM brand (at Zoopla in 2009, when we acquired Propertyfinder.com which had the oldest legacy recognition of all portals, we let its name continue for 3 months with ‘from Zoopla’ across the logo, then killed the brand. Same with ThinkProperty, HotProperty, Findaproperty, all of them – the longer you leave it the worse it gets!)

So hopefully, they’re going to go with Homes.com in all territories, get some cross-pollination and unique traffic as a result, build a cross-border competitor for the ages and start to help agents (alongside us here!) to battle Rightmove in the UK, Zillow in the US and REA in Australia.

Otherwise there has to be a worry that they’ve bitten off a hell of a lot in one go – and that swallowing it is going to be painful, slow and potentially life-threatening.