Is the Future of Real Estate in Google’s Algorithm?
As firmly as IBM ruled mainframe computing and Microsoft the personal computer age for many years, so currently Google today rules the Internet. Originally nicknamed “BackRub” in 1998 by Stanford University buddies, Serge Brin and Larry Page, Google has not only become one of the most admired companies of the modern day but has found itself into our every day language, with the verb “google” being added to the Oxford dictionary in 2006.
The stock price rocketed after its initial public offering price of $85 dollars in August of 2004 to over $720 in November 2007. At that time only Exxon Mobil Corp., General Electric Co., Microsoft Corp. and AT&T Inc. had a higher market capitalization among U.S. companies. Today at around $470, nearly 40% from its high, Google still commands a market capitalization of over $110 billion and continues to battle with giants such as News Corp. and Microsoft.
Google, with its network composed of hundreds of thousands of servers, Google’s system never ages. When its individual pieces die, engineers just pluck them out and replace them with new, faster boxes. This means the “Google cloud” regenerates as it grows, almost like a living organism.
At the same time Google at some accounts has become the gatekeeper of all information. Google also advises us that “real estate” is the most searched category on the Web - with the 2000-05 housing boom and the subsequent sub-prime and foreclosure catastrophe, this is maybe not that all surprising. But let’s look beyond that for a second.
With some 141 million individually identified pieces of property in the U.S., real estate is at the very center of the American way of life – whether living, working, sport or entertainment. As Google conducts more real estate searches it aggregates more real estate information. Potentially with each new property search, each new listing added to its “deep search” database, each virtual street tour completed, each foreclosure filed, and so on Google gains more knowledge of the real estate industry.
It actually is becoming increasingly harder to wrap your mind around just what exactly Google is – and more importantly what it may become.
Could Google become the best advertising vehicle of all time to find and to market a house for sale?
And if it does, could that reduce the need for various traditional real estate brokerage services?
And if yes, to what extent and in what way, could Google influence the fundamental re-engineering of one of the oldest sales professions?
What are your thoughts?
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Your statement “…real estate is at the very center of the American way of life…” is precisely why the industry can not, will not and is not being ignored by those outside our industry. MSN, Yahoo and Google aren’t really interested in partnerships with the real estate industry. They are, however, interested in developing a relationship with the consumer in order to stake a claim to the billions of dollars connected with property transactions. We should be inventing our own algorithm…soon.
While I am aware that a large % of buyer’s and sellers turn to Google to begin their real estate search, I feel that to turn the largest single asset that most people are buying or selling over to a nameless, faceless entity, is not the right thing to do. One does not know, with whom they are dealing and let’s face it…..all of us, who know at least ten people, know at least 3 people in the real estate business. Perhaps the best place to start is there. Secondly, you need to be sure you are dealing with a REALTOR, not just anyone, who has a license. What is the difference? A REALTOR is a license agent, who is a member of the National Association of REALTORS and pledges to abide by a strict code of ethics. Does this mean that all non-REALTORS are dishonest and all REALTORS are the creme de le creme? No! But if you put 100 REALTORS in a barrel and 100 non-REALTORS in a barrel and reach in and pulled out an agent from each, the odds are the agent from the REALTOR barrel would be more ethical and more knowledgeable than the one pulled from the non-REALTOR barrel. The National REALTOR Association is one of the few associations that dedicates their resources to protecting your private property rights. Don’t gamble with the most valuable or one of the most valuable assets you own.
As always…Interesting, Outside the box and Thought provoking. Thanks Stefan for keeping the real estate industry thinking ahead.
Stefan, did you see Google’s last quarters results? Pretty impressive. Google is one migthy powerful company.
I certainly agree that real estate professionals need to change how we conduct our business. Surely, the commission has always been a thorn for most consumers; but now, the Internet (whether it be Google or some other engines or websites) has given the consumer great leverage by the information the I-net provides.
The National Association of Realtors (NAR), as great as its been, will have to be seen as more than just a shill for its members. Yes, NAR strongly and outspokenly supports property rights but it must do more for its members.
ARPAC will continue to help elect candidates who espouse the pre-eminence of property rights but the public (increasingly international) must be convinced that NAR sees just as great a mission as educating and protecting the public. The terms “Buyer Beware” and “Law of Agency” seem mutually exclusive especially when a real estate transaction goes awry. In other words, what is the public buying when they sign an exclusive brokerage agreement? I would think it’s more than the ubiquitous disclaimers most, if not all, real estate contracts contain.
In other words, I don’t think we need to change our algorithm as much as we need to work to change much of the public’s perception of our profession. In the old “who would you save” bromide, saving the real estate agent should be right after saving my family. Can we as a business reach this ideal?