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What The Microsoft-Facebook Deal Means For Real Estate — Part 2: Revisiting Move.com Vs. ActiveRain

Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. ()

October 26th, 2007 · 9 Comments

Yesterday I, among many others, commented on the Microsoft-Facebook deal — though in my case, I’m more interested in the potential impact on real estate than I am in the specifics of the deal itself.  While yesterday’s post thought through the implications for real estate consumers in the mid-Peninsula, today I have some thoughts on the implications for real estate professionals, and in particular the ongoing legal brouhaha between Move.com and Active Rain.

A quick recap:  Move.com, the 800-lb gorilla of the online real estate world, was apparently in negotiations to buy ActiveRain, the 50,000-member strong real estate blogging site.  The price tag was rumored to be around $30M.  ActiveRain is now suing Move.com for allegedly reneging on the deal.

The $30M price tag certainly raised eye brows.  The BawldGuy himself wondered aloud in a comment on my first article on the issue whether ActiveRain was even worth $1M.  My back of the envelope calculation — based on the fact that Facebook was roughly valued at $250/user – suggested an argument for a $12.5M valuation for ActiveRain.  Yesterday’s news upped the ante for Facebook to around $300/user, implying ActiveRain may have a value of $15M.

Back to Microsoft-Facebook for a minute.  What does Microsoft see in Facebook?  Simple — it has the potential to become a finely honed online advertising machine, in which Microsoft can target users’ interest with pinpoint precision — not (as is currently the case with search engines) simply by what the user is searching for, but rather by what the users’ interests, group memberships, and friends’ list implies about his or her interests.  You’re a member of the groups “San Francisco” and “Wine afficionados?”  Perfect — we’ll serve you up with an ad for a weekend getaway in Napa.

What does (or did) Move.com see in ActiveRain?  Perhaps one of (at least) two things:

1) Yet another venue to rape pillage plunder charge agents for the Web 2.0 equivalent of “Enhanced Listings.”  Want to have a blog?  That’s free.  Oh, you want to actually be able to write something in your blog and have pictures, links, and comments?  That’ll be $4.95/month.  Want to get rid of competing agents’ ads next to your blog articles?  Another $4.95/month, please.  Want to “enhance” your blog so it shows up higher in a search on Active Rain?  $9.95.

2) A finely honed online advertising machine, a la Facebook, but specifically within the real estate industry.  Again, ads could be tailored according to the users’ group memberships and friend lists.  You’re a Coldwell Banker agent, and a member of the “Boise interest group”?  We’ll serve you up an ad from a competing Prudential franchise in Boise that’s looking to expand.  You’re reading an article comparing some of the different MLS search providers?  Bingo!  We’ll show you an ad advertising such wares, along with a one month free coupon.

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