The portal wars are ‘like chess without a checkmate’: DelPrete

This article was shared here with permission from Mike DelPrete for Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

As 2024 draws to a close, it’s worth revisiting the portal wars in the U.S. — and how little has changed.

Why it matters: It’s a case study that illustrates two important lessons: hype is not the same as reality, and some games just can’t be won.

• The potential disruptor is CoStar, which has invested over $1 billion in Homes.com to challenge the incumbent portals for dominance, with traffic growing alongside a massive advertising spend.

Yes, but: Corresponding revenue growth has slowed and pales in comparison to the established portals.

• In the latest quarter, Zillow’s real estate lead gen revenue was about 20 times higher than Homes.com’s.

Zillow’s lead over the No. 2 portal, Realtor.com, as measured by real estate lead gen revenue, has remained relatively constant over time — and if anything, has increased.

• The recent uptick could be a result of strength in a down market, Zillow flexing its Flex muscle, or just slower growth at Realtor.com.
• But the result is key: The No. 1 portal’s competitive position tends to get stronger over time.

The same scenario has played out in Australia and the U.K., where the leading portals command a significant revenue lead over their rivals.

• Interestingly, that lead is similar in all three markets — an average of 3.3x and increasing over time.
• The No. 1 portals stay strong and get stronger over time, the beneficiary of network effects, with no examples of that dominant position being eroded.