Online real estate merger mania
July 30, 2004
Consolidation to bring 'excitement' to the industry
By Glenn Roberts Jr.
Inman News
SAN FRANCISCO—Real estate consolidation is not just for the brick-and-mortar crowd, said Steve Ozonian, national home-ownership executive at Bank of America.
"Now you're going to see it occurring in the online space," said Ozonian, former president of Realtor.com and a former RE/MAX senior executive. Ozonian spoke during a "Trend outlook and key differentiators" panel today at Inman News' Real Estate Connect 2004 conference in San Francisco. Jim Steele, president of worldwide operations for Salesforce.com, and Mike McCarthy, general manager for Ditech.com, also participated on the panel.
As this online jockeying heats up, the big players "have to start making some bets and they have to start taking some stake in how that progress is moving along," Ozonian said.
It's no surprise that LendingTree is gunning for a large slice of the real estate pie, he said. Other big companies have thrown their weight into real estate before, and these companies have left an indelible mark, even if they didn't stick around.
"They came in and they did forever change the face of the industry. I don't find it odd that another big player has decided that this is a good place to play." He noted that companies such as Merrill Lynch and Sears helped pave the way for some real estate industry giants.
The industry is too disjointed today, Ozonian said, and this is disappointing considering the technologies that are available. "You'd think that we'd have a more seamless, integrated process." There are several companies offering online leads to Realtors these days, he noted, and the companies offering quality leads will have the best chance to succeed.
From left to right, Mike McCarthy, general manager of Ditech.com; Jim Steele, president of Salesforce.com; and Steve Ozonian, national home-ownership executive at Bank of America, participate in a technology trends panel at Real Estate Connect 2004 in San Francisco.
"At the end of the day this business is about scale," Ozonian said, and the real estate market is going to get more challenging – and more exciting – as the market hits a wall and begins to slow down. "It's going to cause more consolidation and more changes. I think the boring is gone forever because technology has helped change the face of the industry forever."
McCarthy, of Ditech, said, "The industry is becoming commoditized," and consumers expect online companies to run more efficiently and to pass along these savings. The adaptation curve can be slow for new technologies, McCarthy said, though the potential for growth is immense. "I really think it's a next-generation impact," he said.
Hear Barry Diller and industry luminaries predict the future of real estate! Get complete audio recordings of this year's event by becoming a Member of Inman News. Join now!
Backing up its Web site with a call center is an important aspect of Ditech's business strategy, McCarthy said. "Immediate response and the Web go hand in hand. You need to be all over that." The company even operates the call center on major holidays. Ditech has embarked on a multilingual program to reach out to potential customers who speak Spanish and Chinese. "What we're doing is empowering consumers to make the choices that are good for them," he said.
Ditech has used many advertising media to bring its name to consumers – everything from racecar logos to television ads. "Ninety-five percent of our media is offline."
Steele, president of worldwide operations for Salesforce.com, a company that performs information technology services for clients in a range of industries, said that new technologies could be a costly venture for companies that don't have the experience to implement the technologies. "So many times they throw technology at a problem and it fails. If the processes aren't in place then the project will fail," he said.
Customer relationship management software, also known as CRM, "has become a four-letter word in the industry," he said, because too many companies have spent too much time and money getting their software to work.
Copyright: Inman News Features
Contact ALTA at 202-296-3671 or [email protected].