This story originally appeared on Real Estate News.
Could Google crush the “portal wars” once and for all?
A key Google partner is starting to display home listing details directly in search results, prompting some industry experts and analysts to question what impact the feature could have on the traffic — and financials — of major portal players like Zillow, Realtor.com and others.
A ‘controlled experiment’: In some markets, Google’s data partner HouseCanary and its IDX site ComeHome are beginning to experiment with placing home listings at the top of Google search results, complete with basic details, price, images and a “Request a tour” button. According to HouseCanary, the company is licensed in all 50 states and in Washington, D.C., as a full-service brokerage.
Real estate consultant and analyst Mike DelPrete was the first to report on the pilot listing initiative.
HouseCanary offered some insight into the “controlled experiment” via an announcement on LinkedIn this week, suggesting that the company and Google “are innovating” and “pushing into new territory” with the effort.
“Before this test started, we contacted and notified every MLS in the regions included. We are working with those MLSs directly and we have active, ongoing communication with them throughout the test. If an MLS has questions or concerns, we address them directly and promptly,” the announcement reads.
“The goal is simple: improve how consumers discover listings while staying aligned with the rules and expectations of the MLS community. We are excited about what we are building with Google, and we are equally committed to doing it the right way with the MLSs and other stakeholders. We will continue to communicate directly with the MLSs involved and respond quickly to any concerns.”
Impacts of previous search shifts: The move to incorporate home listing information into Google comes over a year after the search giant started integrating AI summaries directly into the top of search results. A July Pew Research Center study found that web users were less likely to click into other pages — such as news media and other outlets that had long depended on traffic as a metric for determining revenue — since Google incorporated AI summaries.
Some major mainstream news sites have seen traffic drop upwards of 30-40% year-over-year partially thanks to AI summaries, NPR reported in July.
What analysts are saying: There may already be concern about what kind of impact home listing summaries on Google pages could have on the top portals. As the leader in home search, Zillow would be the site with the most to lose. At the time of publishing this story, Zillow’s share price has dropped more than 8% since the opening bell on Dec. 15.
But some analysts say the concerns may be exaggerated.
“While we don’t expect a direct near-term impact on Zillow’s business, given that most of Zillow’s traffic is direct (e.g., Zillow.com, StreetEasy.com, mobile apps) and Google’s new product is currently limited to select markets and mobile browsers, we view this development as a long-term risk for real estate portals like Zillow,” Goldman Sachs analyst Michael Ng wrote in a recent note to clients, CNBC reports.
Piper Sandler called the concerns “overblown,” and analysts with Oppenheimer and Wells Fargo also appeared to be less concerned about immediate impacts on Zillow’s traffic and revenue. Instead, they suggest that the experiment may simply present a new opportunity for Google to generate more revenue.
Wells Fargo analyst Alec Brondolo sees “Zillow, Homes.com, Realtor.com, etc. bidding for home listing ad units rather than Google attempting to monetize directly with an ad product sold to agents,” CNBC reported.
In a blog post, Victor Lund, managing partner of real estate consulting firm WAV Group, highlighted some issues with the pilot and suggested it could overstep existing norms and standards with the IDX protocol.
“IDX was never designed to allow listings to be turned into paid media inventory on global ad networks. If this practice stands, it redefines IDX from a display-based cooperation agreement into an advertising license, something neither MLSs nor brokers have agreed to,” Lund wrote.
Real Estate News has reached out to HouseCanary for more details on the scope and scale of the experiment and to Zillow for comment on the new Google feature.
