Home Real Estate Curious Things Are Afoot, Part 1: Move Acquires SocialBios

Curious Things Are Afoot, Part 1: Move Acquires SocialBios

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This is the first part of what I think will be a three-part examination of some rather curious things I’ve been seeing.

First of all, I’m sure other sites will be announcing the news that MOVE has acquired the startup SocialBios. From the press release:

Move, Inc. (Nasdaq: MOVE), the leader in online real estate, today announced its acquisition of SocialBios, an award-winning social search platform. SocialBios allows individuals and companies to create one social hub for their online profiles through interactive ‘About Us’ pages that simplify the discovery of shared connections on Facebook, LinkedIn, Twitter, Foursquare and Google without sacrificing their privacy.

The acquisition of SocialBios points to Move’s acceleration into the area of social and its integration into the real estate search experience throughout Move’s online real estate network. As a result, Move will leverage the SocialBios platform and talent to develop products that connect people with real estate professionals based on the commonalities of their on- and offline social networks..

As part of the acquisition, SocialBios founder Ernie Graham and co-founders Ira McMahon and Andrew Van Tassel have joined the product development team at Move, Inc. Graham, who will head up Move’s social product strategy and development team, will work with the Move’s franchise and broker customers to develop social graphing strategies that help them facilitate more connections between their agents and brokers with consumers.

I wrote about SocialBios a few months ago when I met Ernie Graham, and the events of that evening are sealed under a blood oath of secrecy. But suffice to say I thought he is a smart guy, and what’s better, a great fella to boot. SocialBios won the ‘Best Tech Startup’ award at Inman NY earlier this year, and now the founders have gotten fabulously rich (or so one hopes).

So congratulations to Ernie and his team, as they now move into the tightly-controlled PR environment of the publicly traded company. Henceforth, he and his whole staff are going to have to learn how to keep their mouths shut lest they make forward looking statements of some sort. <grin>

But that news alone is not worthy of a post. So what makes this interesting? Read on, but caveat lector.

Moving Into Social

The last time Move ventured into an area, it triggered a transformation: listing syndication. When Move acquired ListHub, I wrote that we’d see a huge push into syndication quality. That is, in fact, what has happened… but with unpredictable consequences that are still playing out. I expect that Move’s move into social in a big way will have similar consequences.

Errol Samuelson, President, Realtor.com

I spoke to Errol Samuelson, the President of Realtor.com, by phone (courtesy of Move’s excellent PR and community department, headed up by Julie Reynolds and Audie Chamberlain) for a good half hour about the acquisition, and beyond it, Move’s thinking behind the deal. What he said was illuminating. [Note that I did not record the conversation, because I’m a blogger not a credentialed “journalist”, so I’ll go by notes.]

Asked why Move did not get into social earlier, Samuelson said that basically, they weren’t thrilled by what they had seen in real estate until they ran across SocialBios. He thought most of the other companies and previous efforts were essentially adapting existing paradigms of online real estate to new channels: putting listings on Facebook is no different than putting them on a website, or indeed, in a newspaper. Doing a blogpost isn’t that different from publishing a newsletter. Tweeting left and right is not that different from what real estate agents have been doing for years to make connections. And from a technology standpoint, what he had seen wasn’t anything that exciting: help with setting up a Facebook Page, or some SEO-oriented mechanisms, etc.

With SocialBios, on the other hand, he felt that he had something different, something that was attempting to use social to accomplish what none of the other tools/companies/people had done: helping consumers answer the critical question of “How do I find the right agent for me?”  (Errol mentioned that this question was the single most asked question in consumer surveys that Move had done.)

Now, I happen to be somewhat skeptical as to whether SocialBios in its current form will become the eHarmony.com of realtor matching, but time will tell on that front. What is more interesting is the motivation for Move to take this step.

Strategic Change?

Consider that Move, from the very inception, has been a media company, with an advertising-based business model. Realtor.com (and later portals like Trulia and Zillow) all worked as a replacement for newspapers: advertise listings and consumers inquire about the property. All of Realtor.com’s efforts to date have been property-centric. The deal with NAR, the purchase of ListHub, the widely-lauded mobile app, the money and effort spent on design, usability, etc. etc. have all been concerned with listings and presenting them to consumers.

The way that Move is entering social suggests a change — or at least a fork — in the strategy. Now, Move will be very much concerned about the agents, about connecting consumers to agents without necessarily having a property in between to mediate the connection. I asked Errol about that, and he replied that they don’t see moving into social as a replacement but as an added layer. He didn’t see Move abandoning the property-centric advertising business model anytime soon; he saw SocialBios (and more importantly, the new social-oriented products that Move will be developing with the SocialBios guys in charge of that division) as an additional layer on top.

I don’t buy it completely.

The reason has to do with fundamental business model: how do you make money? With traditional property-centric advertising, the model is “pay $X for eyeballs”. With a social agent-centric connection model (the best analogue is dating websites), the model has to become something far closer to a subscription business: “pay $Y to join the network”. Software sales don’t make much sense (“Pay $Z to buy our software that will let you connect”) since that lacks a recurring revenue model that would justify development costs for such a small market (1 million REALTORS, and shrinking).

So subscription it is! And why not? Zillow has been making bank with its subscription-based business, even as the advertising business stalled.

Whose Ox Is About To Get Gored?

Whenever a major company like Move makes a move (jeez, so many inescapable puns), one has to ask who is about to get hurt. Companies don’t make acquisitions, don’t make major strategic moves, without thinking about who they’re competing against, how the move will benefit them, etc.

So let us assume for the moment that Move’s foray into social is a good move. Let’s say that SocialBios acquisition will be the cornerstone of a new strategy, just as the ListHub acquisition was the cornerstone of an extension of the existing strategy. Cui malo?

At the top of the list, one has to put Zillow — Move’s archrival. Having stolen a march on Zillow by acquiring ListHub, thereby consolidating the property-centric strategy, now Move wants to establish a social strategy that Zillow does not appear to have in place (yet). Given that Spencer Rascoff and team are smart people, one assumes that we’ll see an answering volley from Zillow soon enough, particularly if the IPO goes well.

But the companies that I think really get their oxen gored are the big franchisors (and to an extent, large brokers). Their raison d’etre is lead generation: connecting their franchisees with consumers. Currently, that’s being done via property-centric advertising models, and Move and Zillow and others are publishing destination sites for the franchisors. Many of them, after all, have syndication agreements in place with all major publishers.

If lead generation moves more and more towards a social-based dating-type of architecture, as SocialBios believes it will, and the big franchisors are years behind the leaders (as they usually are)… then their value to the franchisees drops. These guys are going to have to figure out how they’ll keep pace with Move and the other big portals who will soon be entering social in a major way. [Or, they’re just going to have to dismiss social as an important lead generation vehicle altogether….]

I think Move’s foray is particularly embarrassing and troublesome for brands like Better Homes & Gardens and Redfin, who have built an identity as being the “next generation real estate company”. Those guys are going to end up looking very much like the last generation if eighteen months from now, Realtor.com is fully baked in with social graph, powering up a huge lead generation engine that has nothing to do with properties or listings, and they’re stuck with one-time award winning websites and listing searches.

Of course, none of that may come to pass, and SocialBios could just flop like crazy. Time will tell.

Meanwhile… Elsewhere In the World…

I titled this series “Curious Things Are Afoot”, because there are two other things going on at the same time as this acquisition that are worth looking at separately. Then we’ll bring them altogether to see what we might imagine about the future, through a glass darkly.

-rsh

4 COMMENTS

  1. Not sold on move as a leader in this space and both social bios and move have yet to implement and prove their product – moreover, it’s not defensible.

    This is not something that is incredibly hard to develop, dream up, or prevent your competitors from being fast followers on – so what is Move really acquiring that is worth paying for?

    • Thanks for the comment. I suppose I should probably let the good folks at Move and SocialBios, both of whom read this blog, to defend themselves.

      As for me, I’m not so interested in this acquisition in and of itself, but more interested in the reasoning that Errol Samuelson gave for why Move made the move. This is more about the real estate industry and how it functions, and how Move — one of the leaders/giants in our space — see the industry than a particular technology.

  2. Yeah…I’m not really interested in the acquisition either seeing that Socialbios hasn’t had more than a few thousand page views since launch.

    My comments were more based around the fact that the acquisition of SocialBios makes me believe they haven’t really thought about a social strategy since SocialBios hasn’t made any impact with agents or consumers…if that team really has ground breaking value to add to the space what are they waiting for?  Just my two cents on the subject but it seems odd to me they would make that acquisition unless it was basically for no money and was more of an acquihire…and they probably can’t draw great people in the social space.

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