Rightmove Dominance under threat as Battle of the Property Portals hots up

For several years Rightmove has been the dominant player in the UK property portal market. Attracting tens of millions of visits to it’s website every month, it is estimated that over 90% of property buyers use the website to search for a home to buy. In fact, recent research suggested that 67% of property buyers who completed a purchase in the UK, first saw the property they bought on Rightmove’s website.

It is easy to see why Rightmove is happy with this situation. They have expolited their dominant market position to consistently increase their profits since launching the website in the year 2000.  However, their contentment is not shared by  many Estate Agents who feel unhappy with the high fees they have to pay to Rightmove, but feel they have no choice but to continue paying them, because no other provider can match their market coverage. Their discontent has increased  markedly in recent weeks,  since Rightmove announced that it will be raising prices by a massive 21%  this year.

Aware of this situation, many other websites have been setup with the aim of challenging Rightmove’s dominant position. Unfortunately, as yet, no company has come up with  a strategy that has succeeded in matching Rightmove. The brands that have come closest to doing so are probably Zoopla, Findaproperty and Globrix, but individually they remain some way behind Rightmove.

However, in October 2011, an anouncement was made that  could change the online proprerty portal landscape in the UK for good.  This was the confirmation that Zoopla and  the Digital Publishing Group (owner of the Globrix and Finda Property brands) were intending to merge their businesses in an attempt to create a credible alternative to Rightmove, with enough marketing muscle to  gain significant market share.

Estate Agents greeted the annoucement with excitement and optimism that this might bring their online marketing costs down. However, after the fanfare of the October announcement there was little further comment on the merger from either Zoopla or DPG in the following months. At the start of 2012, both companies launched expensive marketing campaigns promoting their own brands separately, which quickly led to rumours of problems with the merger.

Zoopla were quick to deny that their were any problems and said that merger talks were progressing as planned. However, it emerged this week that the Office of Fair Trading (OFT) is investigating the merger. This has angered many estate agents who feel that the merger, rather than being anti-competitive, is  the most pro-competiton development in the industry in the past decade.

A number of Estate Agents revealed that they had received comprehensive questionaires from the OFT asking for their views on the merger alon with details of their usage of online marketing portals. Zoopla, publicly at least, appear unconcerned by the OFT investigation, commenting that an investigation is normal, and to be expected,  when a merger of such scale takes place. Their spokesman pointed out that “agents have been crying out for a genuine competitor to Rightmove for years” and said that they are confident the deal will be approved by the OFT.

The Zoopla spokesman also clearly stated their intention to  take on Rightmove by offering a cheaper  alternative solution to estate agents, saying: “We intend to change Rightmove’s dominance by being the most cost-efficient advertising option for agents and creating real competition in the market.”  Such words will, no doubt, be music to the ears of many estate agents.