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Portal peace in our time

It’s over. Done. The only ones interested are those with too much time on their hands. For God’s sake - behind the scenes, even people at the centre of it all admit it’s all over, too.

‘It’, of course, is the rivalry between Rightmove and Zoopla. 

It’s been a long-running saga which was temporarily interrupted by OnTheMarket, but since that has turned out to be a blip rather than a game changer, many people still believe the race is on between Rightmove and Zoopla. 

However, these two portals aren’t involved in cut-throat competition any more. 

They’ve gone in very different directions. Although listings remain central to both, and each still speaks enthusiastically about its visits, listings, member agents and portable device access, these portals’ services to the public and agents have diverged significantly. 

Let’s start with Rightmove: Its business model is strikingly simple, as set out in its investor relations website section. It operates a ‘two-sided network’ - on one side is the ‘largest and most engaged property audience and on the other side, the largest inventory of properties. 

In other words, inventory - and having the biggest inventory - is key. 

Its latest full-year figures, now 12 months old, say there were a record 1.3 billion visits to the portal in 2015, a rise of 18 per cent over 2014. A record 49.8m leads were generated for agents compared with 42.8m the year before, representing a rise of 16 per cent. 

Figures for 2016 will be produced by Rightmove before the end of this month and on the basis of hints and ad hoc mentions - like the recent statement that Christmas 2016 figures were five per cent up on the year before - they are likely to show another annual rise.

Rightmove relies on little apart from inventory, leads, visits and the like - and that pays off handsomely. For 2015, average revenue per advertiser was up 10 per cent on the previous year at £754 per month, with total revenue at £192m and underlying profit at £144m. Once again, few would bet those figures will not be exceeded for 2016.

City investment consultancy Jefferies has already said ”Rightmove operates the most robust business model we have ever seen” (quite a compliment coming from a firm that works with Zoopla on occasion) and may expand into agency back-office IT and support services. But essentially that amazing business model is closely wedded to listings and agents and any expansion is likely to build on that.

Zoopla’s position is very different, and not just because its inventory is lower than Rightmove’s - it is different because it has moved to a significantly different model.

It recorded in 2016 some 600m visits to the group’s websites and mobile apps, of which 68 per cent were via mobile devices. There were over 23m leads generated, 350,000 property appraisal leads: on a like for like basis, leads were 22 per cent up on the year before.

While visits and leads were well down on Rightmove’s - notwithstanding what appears to be a steady stream of returnees from OnTheMarket likely to improve those Zoopla figures in the months to come - the rest of Zoopla’s balance sheet strikes a different tone.

That is because Zoopla has gone on an acquisition spree to broaden its business base, so that while inventory is still key it is not the only string to Zoopla’s bow. 

In the past two years Zoopla has acquired uSwitch, the Property Software Group, website design beginess Technicweb, home insurance provider Neos, and now - in the past few days - the property data consultancy Hometrack. It has also invested in a range of start-ups, connected with property but not inherently reliant on its website stock inventory.

Little wonder ZPG’s most recent financial figures showed its 2016 full year revenue at £197.7, and its profit at £36.7m - similar to Rightmove, if the figures are cut the right way, but derived from a range of different sources. 

So while ‘portal wars’ were fascinating at the time - remember the occasional comment in 2015 that OnTheMarket would knock Zoopla off its second-spot and then move on to displace Rightmove? - those wars are over now.

Rightmove is inventory king and Zoopla is associated services king. They look like staying that way for some time to come.

*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting all things property @PropertyJourn

  • Simon shinerock

    Rightmove sticks to the knitting while Zoopla embraces change and opportunity. I wonder which strategy will prove more successful, I know where my money is (hint, I don't own any Rightmove shares)

  • Owen Nato

    And thank god for that.

  • Martin Williams

    How long before RM gets into conveyancing... mortgages.... insurance... dare i say estate agency ...

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    As touched on below, while RM is maintaining a profit margin of 70% or whatever - there is no need for them to go direct to the consumer. Acting as the middle man has served them brilliantly for the last 20 years, and they've only been getting stronger in recent times.

     
  • James Robinson

    Currently they can’t become online estate agents without hurting their main revenue stream, i.e. us, however when they decide the time is right to compete with the likes of Purplebicks there will be damn all we can do about it.
    People want a more affordable alternative, and the portals will soon be able to give it to them, so general estate agency has to evolve or the portals will destroy our industry. The portals know this, why else do you think these multi-billion pound behemoths have not bought a single estate agency between them? High value and central London markets will still require good estate agents but presently the turnover in this market has become negligible.

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