Google's launch into UK online property poses a severe threat to property intermediaries
Google could become the biggest threat to online property intermediaries overnight
Google is said to be considering a launch into the UK property market next year. This will allow both estate agents and private sellers to put their property for sale as an overlay on Google Maps. Whilst this is open to estate agents to exploit as well as private sellers, if it becomes incredibly popular, (and there's every reason why it will), and the average private seller becomes more technologically savvy, estate agents as we know them, will cease to provide any real value to sellers and offer no value as part of the supply chain. Moreover, the role of the intermediary in online supply chain mechanics overall, is changing.
In its early years the Internet was heralded as the great disintermediator - removing the need for middle-men across the entire spectrum of commercial affairs, and allowing manufacturers and suppliers to have direct interaction with their customer bases - present and future. This was Phase 1. It was rapid. There was a dramatic increase in market transparency that allowed people to see prices and products from multiple suppliers, allowing them to price compare, become more discerning consumers and buy direct from the producer of the product. The internet however grew to a size that meant the consumer wasn't getting the maximum market transparency that was possible; with thousands of sites selling a product, how could someone determine whether they were getting the best price?
This ushered in Phase 2, new companies with innovative technologies entering the fray to provide a new level market transparency. Sites like Moneysupermarket and Rightmove, aggregating data, and essentially reintermediating the supply chain. During this time search engines have become increasingly central to the consumer's online experience, with most consumer internet sessions beginning at one of the three major search engines.
If the likes of Moneysupermarket have good technologies, the likes of Google have incredible technologies, allowing them to usher in what appears to be Phase 3 in this history of intermediation. Being so central to people's online experiences and having so much great technology (and money) has allowed Google to become the ultimate informational intermediary, essentially reintermediating an already reintermediated supply chain!
The likes of Rightmove should be very concerned, and a drop in share value following early reports of Google's intention to enter the UK online property market, confirms it's a sentiment shared by many. All Phase 2 intermediaries should now be rethinking their business models in light of this move and at the very least determining how they should operate in the next few years.
For Google, such a move will act as a precedent for how it approaches reintermediation in other markets. The potential for turning these into new revenue streams is huge. It may however lead to greater scrutiny from the likes of Monopolies & Mergers and Antitrust.
Websites like Rightmove are placed in a relatively weak position when Google infringes into their perceived territory. Google has more visitors, more money, a bigger brand, and better technology. Players in the online property game would need to look to alter their business models to reflect the fact that Google could become their biggest competitor overnight if it so chooses.
For the consumer, Google's move means more choice, cheaper property through improved market transparency, no estate agency fees and efficient and comprehensive property search.