Wednesday, 6 June 2018

Property portals ‘at saturation point and can only raise prices by so much’ – where do they go from here?

The big property portals have reached saturation point – with no new customer agents to recruit.
The big property portals are also being warned that they can only raise prices by so much, and that as long as most of their income comes from agents paying to list, there is not much diversification.
In his latest report, expert Mike DelPrete says RIghtmove and Zoopla have taken completely opposite stances: Rightmove has stuck to the knitting, whereas Zoopla has gone for a ‘one stop shop’ diversification.
Delpret observes that ‘adjacent revenue streams’ are far less profitable than classified listings.
But he also credits Zoopla as being the ‘global leader’ in diversification.
He says its portal-only business accounts for 25% of revenues, and that ZPG has spent a lot on acquisitions, at £450m.
He says it has executed its strategy well.
Despite this, DelPrete thinks that “the verdict is still out on the synergy value”.
It is not, he says, what he would call a runaway cross-sell success. ZPG’s businesses include portals, utility switching, estate agents’ software, and more.

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