HouseValues invests in Active Rain

January 22, 2008
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: 
From Inman: 
“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.”  
From their own link here:   
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.

What is the Point2 NLS?

August 20, 2007

Here is a little NLS presenation about “Complete Control and Choice”. 

 Hope you enjoy it!

“Neighborhood Discussions”

July 11, 2007

An article in Inman has just reported that Zillow has now announced that they have added neighbourhood pages and according to a Zillow spokes person “The pages are seeded with rich local demographic and real estate information, but are built for communities and neighbors to make their own.”  According to the Zillow announcement, “Zillow’s online community can add photos, events and news, and can participate in discussions and ask or answer questions”

Ostensibly it appears to be about creating an “online community” where users can actively participate and contribute.  What it is really about is “User Generated content” , which,  in my not so humble opinion,  is quickly becoming the next big thing.    Zillow, Trulia and Redfin are all trying to build a “community” where consumers can discuss real estate.  Will this work?   Hmmmn, I think it might be more challenging than it may appear.  Why? Because the average consumer only discusses real estate once every seven or eight years when they are thinking about moving.  At that particular time they are very interested in participating (or at least learning) from this type of “community”.   

In a past life I spent a lot of money on advertising in print, radio, TV and online. I know first  hand that most of your advertising dollars are only effective for people that are “In the market” for your product. Think about the last time you purchased something , for instance, like your last computer.  When you are in the market you suddenly notice all the advertising,  once you buy a system it is best if you stop looking immediately lest you suffer a severe bout of anxiety as better systems sell for cheaper.

What does that mean for a “real estate” centric community?  Simply put it means that your number one draw (real estate info) will only be effective on the subset of consumers that are interested in real estate and this is a much smaller subset of consumers. While Truila voices and Redfin’s forums might be satisfied with this audience, I think that Zillow has a much bigger designs than having a community that is only about, and for, people in the market.  I think they want to build a community that people use all the time in their daily lives, and are using people’s homes as starting point.

Again, in my opinion this is easier said than done.  They will be competing for attention with all types of communities – from the local community, news and city guide type websites to facebook, myspace and even wikipedia.   Trying to be “the place” is a really tall order.  Uploading neighbourhood photo’s, news and events will simply not be enough, in my opinion, to create a vibrant community that consumers visit and contribute to often. They will have to do more, and I am sure they understand that.

One group that we know for sure that has expert knowledge, is always “in the market” and can and will contribute to the neighbourhood information that consumers need (when they are in the market) is real estate professionals.  We have created a tremendous resource in our neighbourhood directory.  We intend to leverage this structure in many ways and in multiple platformsThis will be done not only to provide great information for consumers but to always provide exposure for; showcase the knowledge of and bring back user generated content for use by the P2NLS real estate professional. 

What does this mean?  It means we are not as concerned with creating “the community” as we are about providing the underlying infrastructure and connecting it to real estate professionals. How are we going to accomplish this?  Just wait and see, in the words of Bryan Adams, “the best is yet to come”. 

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