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Interesting news on the House Values 2.75 Million investment in  Active Rain today.  On the face of things it certainly appears to be an ironic relationship. However, upon closer inspection it may make a lot more sense then one might first think.  I think it will be worth watching closely.
Whenever I hear about an “investment” the first thing that pops into my mind is:  “What will they do with the money?”   Then, quickly on the heals of that, “How will they make their investors happy?  IE give them a good return on their investment.
Hmmn, good questions.  Here is what they are saying publicly:
“The outside blogging platform, currently in beta form, is expected to launch in early February, Heaton said. “We found we had a lot of agents who started blogging at ActiveRain, then would go get their own blogs because they wanted their own branding,” he said. The outside blogs offered by   ActiveRain will still be managed through the network so that agents can leverage the visibility from the community onto their outside, consumer-facing blogs. The cost for an outside blog will be roughly $100 per year, according to CEO Jonathan Washburn. Heaton and Washburn say the core blogging and social networking service at ActiveRain will remain free to users.”
We never set out with little plans and we are going forward with big ones.  The future of this community – and this business — rests on three pillars: ActiveRain (our professional network), Localism (our consumer destination), and our soon-to-be-released Outside Blogging platform. These things stir our blood. We hope they will stir yours.
Also (and I am too lazy to reference the actual docs) they said in their Move lawsuit that they had already started to build a self serve ad system to monetize local services on localism, until Move told them to stop.
So it would seem to suggest that, publicly at least, they are saying they are going to do these things:
  1. Monetize localism by building an online ad serving system.
  2. Build an “outside blog” blogging platform for Active Rain.
Hmmn, interesting.  I have know Matt and Jonathan for sometime and I respect what they are doing.  They certainly have captured the hearts and minds of lots of web 2.0 type real estate professionals. I wouldn’t for a minute sell them short.
That said, I do have some concerns if these publicly stated things are truly what they are after.  Monetizing localism, for example is a great idea, but let’s face it, your main competition is going to be Google Adwords, Zillow, Yahoo et. al.  I know that the Active Rain guys will have a highly targeted hyper local audience making their offering quite attractive, but still …. some pretty big name competition.
The blogging platform seems to have demand from AR’s current user base (at least I am assuming it does or Matt and Jon wouldn’t be building it). I am also confident that AR’s platform will be perfectly suited for real estate professionals. In fact, I bet it will kick ass. That said, I am not sure it will be sustainable in the long run.  Again, look at the competition: TypePad, WordPress, Blogger, Six Apart, the list goes on and most of these products are free to boot!
So, all that said I know that Ian and Gregg at HouseValues know all this, yet still they are investing 2.75M.
I guess what I am really saying is that there is more here than meets the eye.