Here lies Web 2.0

John Cable published a blog post this past October titled "The End of Web 2.0?"

His end was marked by the drained IV bag of venture capital that no longer pumped its lifeblood into the veins of all the loosey-goosey ideas hatched to amass audience rather than revenue. When the flow stopped, so did they.

Many are now on life support. Last December, Peter Schwartz published this article in the The Huffington Post. He cites the Web's most popular social network, Facebook, and the $300 million they earn as having little impact on the expenses they burn. With ad dollars evaporating and their need to add more servers and personnel, their future, in a way, looks grim. 

Peter talks about Web 2.0 burnout, and the "longing to return to the wholeness of the physical world." That has resonated heavily with me for a while now.

As Peter explains, Facebook grows by reaching new audiences but also recedes as old audiences shut it off. They unhook. And go back to taking long walks, reading books, hanging with real friends and seeking some white space in life. 

Twitter continues to grow at an explosive rate. In better, more fantastical times, fanciful conjecture such the late Portland journalist Russell Shaw's prediction that Google should buy it might be exciting. But this would'nt be too thrilling today unless Twitter or Google could explain how to monetize all those millions of disposable and time sensitive Tweets. 

The true fate of Web 2.0 

In recent months we've read about layoffs in the Web 2.0 space. Jaxter, LastFM, Mahalo, Yoomba, LinkedIn and YouSendit are some of the many firms doing everything they can to weather the storm.    

None of this comes as any surprise given the state of our economy. But does all this point to a pandemic that could wipe out even the most popular Web 2.0 sites? 

It's still too early to tell of course. But we all need to be prepared. There are plenty hanging on for dear life in real estate.

In order to survive they must evolve out of the primordial FREE waters of Web 2.0, deliver real benefits and start charging their users. This presents a challenge to the many people who have been enjoying and benefiting from these no-cost services.

A couple weeks ago real estate's largest online community, Active Rain, enacted a controversial subscription fee for new members. It would be absurd to think that AR could continue operating without finding some way to monetize members who use its platform to build their businesses.

Recently, on Twitter I posed the question, "Would anyone here pay for their Twitter account?" Every single single response I got was "not I."

Really? Mmm. I would. Considering the benefits I've reaped from a free Twitter, I can only imagine what I could garner interacting with a paid membership. The thought of Twitter going away because they can't create revenue from its millions of users who have been spoiled by free is alarmingly sad. 

So given the inevitability that many more Web 2.0 sites will perish, including those inside our own industry, do you have a game plan for what's next when the free service you've been leveraging either goes belly up or starts charging?

You should. After all, it's not likely that door knocking is going to come back into fashion.  

- Davison

Twitter: 1000wattmarc

Mobile cheese? How about a mobile VOW?

Greg Sterling over at Local Mobile Search notes Kraft's launch of an iPhone app that helps users find local grocery stores, build shopping lists and more. It also includes ads and coupons for Kraft products.

Smart people at Kraft apparently think people will pay to be pitched a deal on Philly Cream Cheese on the go: The app costs 99 cents.

So, this works for a major consumer brand? We'll see. Others have seen success in this vein. But it got me thinking about the mobile opportunity in real estate, which seems to appear and recede in fits and starts. Trulia's put a nice stake in the ground here, but as always, I can't get too excited about something that only shows me some of the active listings. Puluwai released an iPhone search app, but it leaves a lot to be desired as far as user experience.

The New York Times and Terabitz [disclosure: Terabitz is a 1000watt Consulting client] have done really nice web-based apps optimized for mobile viewing, but have yet to make a move on a native handset app.

So, who's going to bust out with the killer mobile app that gives me all the listings in an elegant package? Who's going to jump on the DOJ ruling to deliver the first mobile VOW - a real estate "office" that fits in the palm of one's hand?

Anyone see something I'm missing?

-- Brian Boero

Sirius XM

The long-awaited merger of satellite radio's two players has finally been approved by the FCC. As an early subscriber to XM who converted to Sirius, I am pleased that, soon, I will be able to reap the benefits of their combined programing. 

Here in real estate, the merger should serve as a breadcrumb left on the path of logic and forward thinking.

Why the merger makes sense

Other than slight differences in individual programs (comedy, music, talk, etc.,) both XM and Sirius are seemingly duplicate models performing duplicate functions vying for the same consumer.

Each company employs staff performing similar functions. Since both entities are not yet profitable, merging will dramatically reduce these redundancies, which would, if allowed to fester, bring about their ruin.

The merger creates one incredibly strong entity from two struggling companies with less than 5% market share fighting each other to the death.

What this means for real estate

This is almost too obvious. M&A activity has dropped off the table in real estate, but does that make sense? Is not a down market the best time to combined staff, mingle offerings, and shore up financials?

I think there's a valid argument here. I've spoken at association meetings and wondered out loud why one association with no technology but a core education competency isn't partnering with a neighboring association with great technology but vulnerabilities in administration or education.

Sirius XM

This is the name of the new entity. To me, it's genius.  Both names own market share. Both names are well known to satellite users. XM is a channel on Ford radios and Sirius is branded on Mercedes. Why create a new name and make customers feel expired?

I think real estate could take a chapter out of this book. What do you think?

- Davison

Waiting for the killer widget

Back in the old days of Web 2.0 and real estate, during 2007, widgets were heralded as the little things that would change everything. They would end search. Make destination websites obsolete. Give users complete control. Coming off well in a meeting was as simple as saying something like:

"We need to be thinking about widgets as a cross-channel, viral vehicle for leveraging synergies to distribute content in game-changing ways."

Many proclaimed the advent of the "widget economy."

Today, two years later, widgets have become a significant part of the online real estate environment. Realtors can now drop all sorts of things into their websites and blogs: Stats and listings from Trulia, Market Data from Altos Research, and dozens of other odds and ends. This sort of quick, easy and free content has been an effective distribution vehicle for many online companies and has enabled agents and brokers to add value to their sites.

But real estate widgets have not fulfilled their promise, which I still believe is considerable, for a couple reasons:

1. They are almost exclusively browser based, as opposed to residing on the desktop. This means that while the widget creator may get distribution for its content on other websites, they are not extending their reach beyond the browser, which is where I think the real opportunity lies (Coldwell Banker did take the lead here early on with its desktop listings widget, but it is limited - so far - by being tied to the Yahoo! Widgets platform).
2. Most widgets were not designed to deliver actionable information. In other words, while they are effective as eye candy, teasers or distribution vehicles, they do not contain enough content to sustain repeat usage or provide the user with enough information to make a decision.

But I think this pattern will be broken -- soon. They launch of Adobe AIR earlier this year has paved the way for truly compelling Internet applications that reside on the desktop. Brands from Pizza Hut to NASDAQ now have a meaningful footprint on consumer desktops using this technology.

Someone in real estate will nail this before the end of the year. It may even be a real estate company. Here are some ideas I have for what a truly killer desktop real estate widget might look like:

1. An open house widget that alerts the user to opens meeting their criteria. The user gets property details, but also fly-outs for a map, comps, and a value estimate
2. A home search/alert widget tied to a full MLS feed. Properties appear in real time and can be dragged and dropped into shareable folders
3. A "Neighbors" widget tied to boundary files offered by Zillow that pings the user when someone in their neighborhood Tweets, blogs, create an online profile, posts a Yelp review or otherwise surfaces online. This one's complicated, but I'd love to see someone tie social activity online to neighborhoods

I'm interested in ideas you may have. Or perhaps you've seen something that approaches this already that I have missed?  Let me know.

-- Brian Boero

The customer has left the building

Last month, the Financial Times reported that Google's search numbers coming from the iPhone were so high the company's engineers thought the data were bogus.

Further on in the article the company's head of mobile operations asserts that "the number of mobile searches will overtake fixed internet searches 'within the next several years'.

I've spent the better part of the past five years making the case that real estate brokers and agents need to ditch the office and its menagerie of paper based, profit eating animals like the copy machine, fax machine, and file cabinet. Adoption has been slow.

But consumers are moving rapidly to relocate the real estate experience away from the desk. And so far, neither the real estate brokerage community or the online real estate industry seem to be taking it all that seriously. Perhaps it's denial. Brokers just getting used to the fact that they need to offer tons of free data and information on their company Websites with no strings attached must grapple with how to serve it up to go. Online media companies challenged to monetize destination websites must now figure out how to monetize a mobile platform.

That's rough, but the customer has left the building. It's time to hit the road with her. There's no choice: She's going with or without you.

Here's an example: If my local brokerage company doesn't offer me an IDX app for my iPhone I'll simply subscribe to a search on Trulia via RSS and view listings within the absolutely amazing experience that the mobile version of Google Reader delivers. That'll be great for me, but tragic for my brokerage and something of a half-win for Trulia, both of which will have conceded an important brand touch point.

Consumers can easily get sports scores and weather on their mobile phones. Where are the homes?

There are some bright spots. Realtor.com launched a Windows Mobile app last year. SmarterAgent, a great little company that survived the online real estate dark age of 2001-2004 just closed a round of financing and is gaining traction for its mobile home search offerings. TextBound, a new venture backed company offering SMS apps to Realtors, launched last week. Zillow has offered Zestimates via SMS for nearly a year and a half. The New York Times and a few other newspapers offer mobile versions of their real estate sections. U.K. based Properazzi unveiled mobile property alerts late last year.

But these are largely small gauge or isolated efforts amid a sea change in consumer behavior. Here are some things I'd like to see soon:

1. A major IDX vendor release a suite of mobile IDX apps for all major platforms (Windows Mobile, Blackberry, Android, etc.)
2. True mobile versions of Zillow, Trulia, Frontdoor and Roost
3. A bunch of real estate iPhone apps unleashed shortly after Apple opens up its platform later this month
4. A real estate website vendor roll out a brokerage web platform optimized for mobile use
5. A real estate specific version of the Yahoo! onePlace service announced today
6. The NAR to redirect every dime it is planning to indulge in the Gateway delusion toward development of mobile applications for practitioners.

Listings are nearly everywhere. The major search sites are reaching parity. IDX is widely adopted. The winners in real estate search will win on experience and service. The small screen will be a key battlefield. Those who ignore the writing on the wall will be pretty lonely back at the office.

-- Brian Boero

60 Minutes on real estate, act two

Last night, millions of Americans got to watch 60-minutes' latest installment on the real estate market.

The segment centered on Stockton, California - ground zero for the foreclosure epidemic, where 4,200 homes  either sit in default or foreclosure. That number was accentuated by ForeclosureRadar.com CEO Sean O'Toole, who illustrated the foreclosure landscape though a city map littered with red and blue dots. According to O'Toole, "The red dots indicate which homes are bank owned, the dark blue dots indicate which homes are being auctioned and the light blue indicate which homes are now in default". He expects many more red and blue dots to appear on his map over the coming months [Disclosure, ForeclosureRadar is a 1000watt client].

Homes are now being auctioned like cattle as homeowners, unable or unwilling to deal with the problem, are  abandoning their homes as if they were bad marriages.

It's hard to watch this unfold and not find yourself feeling weary trying to figure out if this could have been averted. Homeowners, at least the few that were interviewed, just seemed downright ignorant and irresponsible. They appeared unaware, perhaps willfully, of what an ARM is and unaware of how buying a half-million dollar home with no money down on middle class wages could ever pencil --- unless, of  course, home prices just continued to soar at 22% a year ... forever.   

The good news for Realtors is there were no fingers pointed towards real estate agents, nor did the segment attempt to cast them as party to the debacle. But it did manage to cast an eye on one local agent who leads  a twice daily Merry Prankster-like bus tour of foreclosed properties. I admire his creativity, but he came off looking like a vulture picking at the scraps of the housing carcass. More subtle and professional methods to handle this are in order.

If this segment did anything, it highlighted the critical, desperate, dire need for honorable, trustworthy, professionals to step up and really start representing.

- Davison

When AdAge starts asking questions, will real estate start listening?

From Advertising Age:

Pay head to what Realtors don't say in their latest pitch

It's one thing for me to constantly harp on the NAR and others for their loose grasp on reality when it comes to advertising, messaging and designing campaigns based on trust and transparency. But when AdAge takes it to task, maybe it's time our industry take the blinders off and grab a second look at what they push out into the marketplace. 

I've never liked the NAR's ethics campaign. It never resonated with me, or maybe anyone for that matter. Honestly, how could it when the spokespeople for ethics are themselves under investigation by the DOJ? But beyond that, can you really sell "ethics" today? Is there a single American who believes anything is ethical because a commercial tells them so? I doubt it. Ethics has been sold down the river in a boat steered by Jeffery Skilling, Dennis Kozlowski, Bernie Ebbers and so many others.

In the words of AdAge:

The campaign, in other words, is a perfect miniature of the inherent conflict of interest Realtors wallow in, like pigs in the sty, all the time. They have no incentive to perform due diligence for buyers. They don't even have incentive to protect their clients, the sellers. Their only interest is in closing the sale. Seven percent of $500,000 is $35,000, no matter who else takes a bath.

I'm not going to go through each paragraph of the article and point out where the writer is off base or over the top in his disdain for the industry. And there's no good reason to anyone to get defensive about his statements. Instead, what we should all focus on is the level of bias the writer possess, which I maintain is shared by many. Far more than I think our industry wants to recognize.

Never is there a more important time than right this second to look at everything you do that is public facing. Check it for bullshit. Check it for hyperbole. Check it for self-aggrandizement. If you blog, talk about this article. Expose it. Write about it. Create a position that removes you from the general stereotype.

If you do not blog, think of ways you reach your constituency, your sphere and help them deal with their issues that right now, they might be dealing with alone. Without you.

NAR could hire the best ad agency on the planet. It won't matter if they can't get the message straight

I'm guessing some of you can.

- Davison

I need to save $0.49 on my shampoo ... wait, maybe I'll buy a home too

The Arizona Republic recently reported that Metro North Realty, a Phoenix based brokerage, opened an office inside the Peoria, Arizona Wal-Mart.

I like to think of myself as open minded. I like pushing the limits. But this one has me confused.

I wonder how any real estate company, poised on the edge of a bad market, tipping on the tightrope of trust, and trying to get top value for their sellers, could think that selling something -- a home -- priced in the hundreds of thousands of dollars inside a retail operation known for slashing vendors' pricing models is a sound, prudent, idea.

According to Daniel McCarthy, Metro North's Peoria office manager, he "expects the mega-retailer's heavy foot traffic to translate into increased sales, giving the company an edge over other real-estate companies using traditional sales methods."

He "expects." No study. No numbers. No nothing. Just a hunch.

Given today's market climate, shouldn't real estate companies be doing more than grasping at straws such as this? Consider Wal-Mart's rap in the minds of consumers. From blogs to documentaries. there is a world of negative energy around the company.

What do sellers think? Would they, you, want your half million dollar home on sale inside a low end brand box store, especially one that tends to cause disharmony in every community they open up in? Shouldn't their long-standing history of disrupting local businesses and merchants be something a local real estate company considers before deciding to affiliate with?       

So where do we go from here? How far are some in this business prepared to go to dilute their brand for the sake of The Next Deal? Will we start seeing real estate banner ads on cyberporn sites? Or how about licensing toll booth takers? They can take change and hand out business cards at the same time. Think of the traffic.

You know why ambulance chasers don't affect the reverence people have for high priced, Park Ave attorneys? It's because people understand the difference between them. Unfortunately, this is too often not the case in real estate. It's getting harder and harder for the consumer to know, off the bat, the differences between a seasoned pro and the agent in aisle 5.

And I think that is a problem. For everyone. Including the consumer.

If it were me, I'd be polishing up my new facility at Neiman Marcus. Guess I'll just have to see where this one goes.

-  Davison

Newspapers: Not dead yet

Editorial policies aside.
The cost aside.
Are newspapers really a dead medium?

If you think that print media -- and in particular newspaper advertising -- is a waste of money, think again. Considering all the honest-to-goodness garbage found in most papers, a well placed, well written, neatly conceptualized ad could do wonders for your brand, your business, your properties and your customers.

I know the Web is cheap. I know it’s easy. But let’s get down to the heart of the matter of real estate’s mass exodus from newspapers. I’m trying to weed through all the crying to mama about the media and the woe-is-me thinking to try and figure out why papers have fallen so out of fashion with real estate.

I think the conventional wisdom here is lacking, so I will offer my own: The newspaper format is waning, and the ROI on newspaper advertising is being questioned, in large part because most in the industry has never figured out how to master it.

Think that’s off base? Take a stroll through your local paper’s real estate section in the shoes of your prospective customer. Does the advertising compel you to action? Does it elevate your consciousness? Does it inspire you to curiosity? Look at what you see in other sections of the paper. Chances are there are some ads that affect you in some manner. How come you never see such things in the real estate section?

If you are willing to acknowledge this, you are on your way toward an opportunity to seize upon the down market to do something different, something smarter, something that seizes the imagination of a jaded public.

And, really, you won’t be wasting money While the numbers are down, a quick glance at newspaper circulation reveals a considerable opportunity to reach deep inside the average American household.

Advertising on internet, while cheap and relatively easy, has another side to it that makes any one advertisement seem like a tiny meteor floating around the vast expanse of space. Newspapers, on the other hand, are simple, sectional and delivered to the potential customer’s doorstep, a tangible element of information at the beginning of day filled with ephemera (there is still no widget or feed that can do that). Everyone who gets a paper at least scans it before placing it in their recycle pile.

For my money, that sort of connection with my customer still holds magnificent potential … unless, of course, I had no idea how to leverage it. This, I believe, is real estate’s bigger problem with newspapers.

As I travel the USA speaking, I make it point, in every city I visit, to pick up the local paper and bring it with me for use as a prop during my speech. Sadly, I know what’s inside the paper before I land. I can count on this material more dependably that I can my flight arrival time. And that’s because every section is a carbon copy of every other in America – twelve or so pages of mediocre, poorly written, poorly designed copycat ads. Image after image of tired, soft focused, unsettled, and inescapably consumed with themselves people saying and offering the reader little that is truly compelling.

Top Producers, Area Specialists, several Agents of the Month – they all clamor for the attention of people looking for something fresh, real, and useful. Claims of honesty, trustworthiness, sophistication and market expertise arise from agents posing with their kids or zipping along on a motorcycle with their monkey Bobo riding shotgun in the sidecar.

Leafing through these pages, I find myself thinking, “No wonder this medium doesn’t work. No one knows how to use it!”

So how do you break out? Start by doing the exact opposite of what everyone else is doing. Take your face out of your ads. You don’t matter anymore (it’s nothing personal). Your services do. Your technology does. You insight does. Your call to action does. Your properties, especially if they aren’t reduced to tiny thumbnails, matter most of all.

Draft a brand message that is unique. Write something profound. Describe services that are honestly distinctive.

Think smart.
Fresh.
Big.

- Davison

Cracking real estate's social media code

Why does facebook flourish?
Why does YourStreet struggle?
Why does Yahoo! Answers thrive?

Search me. And really, who really knows these things? At this point in the short life of social media, anyone who puts forth claims to absolute certainty is most likely a charlatan. There's just not enough data to support conclusive empirical work; not enough years to create wisdom. We're all feeling around in the dark to some extent.

Those trying to crack the real estate social media code are thus left working the edges. We draw upon other bodies of work to throw our best sneaky knuckleball at a moving target.

In some ways this is scary. But I like to think that it requires creativity, intellectual curiosity and risk - in other words, the fun stuff!

It is in that spirit that I recommend Bowling Alone: The Collapse and Revival of American Community, by Harvard political scientist Robert Putnam, to anyone thinking about creating social applications in real estate, whether that be neighbor to neighbor, Realtor to consumer or Realtor to Realtor.

Putnam assiduously (beware: this book is not a page turner) documents the rapid decline of the American social fabric over the past four decades. Civic organizations like Rotary have been decimated; people visit and eat with their neighbors far less; casual social nodes like bowling leagues and bridge clubs have become antique curiosities or ironic hipster style statements.

I can't begin to document the breadth of Putnam's argument, or the depth of data that support it, but the bottom line is clear: We form meaningful connections with others far less than we used to.

You know the question this begs: What makes us in the real estate 2.0 world think we can buck a 40-year trend of social erosion with a bit of php, some glassy logos and playful avatars?

It gives one pause.

OK, OK ... it's not all gloom and doom, There are rays of hope in this book. Clues that might guide those of us seeking to build connections between people around housing. You'll have to read it to get all of them, but there is a reason why the number of political interest groups has mushroomed, or the amount Americans give to charity has grown, in spite of the larger trend. It's about reaching people in ways that are convenient and asking of them only what they can realistically be expected to give.

I'll dig into these paths forward in a second post. In the meantime, buy the book!

-- Brian Boero