Rightmove is “arrogant and vulnerable”

I was presenting at last week’s PropTech & PortalWatch Conference (#PTPW24) in Barcelona. It was a great event over three days and one I’m sure that I’ll return to in future blogs.

This week, however, I want to zero-in on a really interesting conversation between the overall boss of OnTheMarket, CoStar’s CEO Andy Florance, and PTPW Founder (and the guy that built REA Group to number one in Australia), Simon Baker. They were chatting about the failure of REA Group to acquire Rightmove, news that had been announced a day or so before they sat on stage.

“No one is more disappointed than me, that the deal did not go through,” Florance revealed in one of many eye-catching exchanges.

“Rightmove is operating at a margin I would never be comfortable operating at, you’re super vulnerable by operating at 74% - it means you’re not working towards growth and you’re not building for the future.”

This is demonstrably true – and something that I’ve argued for a long time - that Rightmove is not working for the industry, not innovating to try and build for the future, it’s a shareholder vehicle to rinse as much as possible from the market before everyone realises that it’s a terrible experience and agent properties and consumer eyeballs go elsewhere.

Perhaps that ‘elsewhere’ will be OnTheMarket – which Florance also revealed will be rebranded as Homes.com (something I’ve also predicted had to happen). This will be a huge moment in the nascent rivalry between RM and CoStar, presumably in time for January 2025 – fresh branding, new ads (I, for one, am here for their fave ad presence Jeff Goldblum wandering the streets of Gilberdyke), bulked-up content about different locations.

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That last piece – differentiated, highly-targeted content – is what Homes.com is known for in the States. It’s what I have no doubt they are working hard on, right now, at OTM Towers.

(So how surprising it was to receive, via email this morning, a request from Rightmove to submit detailed content about my own area! This will give RM some unique, crowd-sourced data that they can build out too. Let it not be said that Rightmove are taking the threat from CoStar lightly, regardless of their public PR.)

“I would rather spend £500m over ten years to become market leader in the UK than £6.4Bn to buy it today,” Andy Florance said a week ago. “I’m very patient. In ten years from now, you will not recognise the landscape in the UK from what we have today.”

That is without doubt the case. Whether it will be Homes.com/uk, Rightmove, Jitty or ChatGPT that we’re all using to search for houses, change is a-coming. Buckle up.