In a week where Rightmove’s account manager heavies are continuing their menacing rounds, softening agents up for 20%+ renewal hikes - and CoStar has made another eye-catching acquisition - what of the UK’s second-largest portal?
Has anyone checked that Zoopla’s OK?
Word is that, this year, the Silver Lake-owned portal has been generally slashing monthly prices and trying to lock agents into long-term contracts. This is a classic defensive move when aggressive competitors arrive to eat your lunch – it’s also, ironically, exactly what Zoopla forced the #2 in the market, Digital Property Group (DPG, owners of Findaproperty and Primelocation at the time), to do when it launched in 2009.
However it can only work when it’s combined with a very specific strategy, one that uses the intervening period to launch something so compelling that agents will renew back at the pervious prices – or higher. But has there been any evidence at all that such a strategy is what Zoopla is building? Or is quiet panic the defining mood in the glass-walled meeting rooms at Houseful Towers?
Zoopla’s deafening silence has echoed even louder this week, as there has been a lot of competitor portal activity happening. I’ve heard numerous stories of Rightmove reps coming hard for agent revenues. They’re rolling out uncompromising package ‘improvements’ that increases the costs for even the most loyal, cheerleading agents – those that backed the portal in the pandemic and took on the expensive Optimiser packages – by a massive 20%.
And these are for those that +like+ Rightmove.
Others are finding their Fine & Country brands, operating from the same offices as their main brands, suddenly being charged as separate premises after decades. Still more are discovering that unmanned shop windows in tiny villages are no longer exempt from full rates. Any anguished complaints are met with the same "talk to the hand cos the shareholders don’t care" attitude that has become even more prevalent under CEO Johan Svanstrom’s watch.
Meantime, CoStar is hoovering up another significant #proptech business in Matterport for £1.3Bn, adding to its growing portfolio of companies that it can use to bolster its unique listing offering. Are agents that use Matterport going to be banned from showcasing their interactive floorplans on portals that are not CoStar’s … such as, I don’t know, Rightmove? Will there be unique enhancements to the tech that are only visible on CoStar sites?
The battle for consumer eyeballs – the one that every portal needs for ultimate victory – isn’t going to be won by having exactly the same property content on competing portals. So perhaps CoStar is seeking to corral data and visuals exclusively on its own sites, forcing applicants to come to them to see the latest tech on display? It’s tough to see that £1.3Bn representing value in many other ways.
Meanwhile, in a quiet corner of London, Zoopla … what? Sleeps? Screams? Negotiates with CoStar?
Surely the only outcome that makes sense is (voluntary or forced) marriage with OnTheMarket, so that the two challengers don’t waste time and money fighting each other and can instead more quickly turn their fire on the big dog, Rightmove. In the end, that’s what happened with DPG – it combined with Zoopla and created a business that eventually sold to Silver Lake for £2.2Bn.
It did take a while though – two years of Zoopla and DPG throwing mud at each other between 2009 and 2011, whilst Rightmove chortled (and continued stealing chunks out of agent wallets). Will CoStar and Silver Lake waste time and money doing the same?
These are two US behemoths that know a thing or two about cold, hard, rational financial decisions. My money’s on a merger being announced before the end of this year and a big coming together under the Homes.com banner. Then, at least, Zoopla’s considerable resources can unfreeze and be put to work on targeting Rightmove alone once more.
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