What's in Store for Yahoo Real Estate

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There have been numerous rumblings over the last week that suggest that Yahoo is planning to lay off hundreds of employees in an attempt to shed some weight and boost its profitability. Now the New York Times is reporting it, suggesting the announcement could come at the end of the month.

So how is this going to affect Yahoo Real Estate?

It’s certainly still one of the most popular real estate destinations online – just behind Realtor.com and MSN Real Estate (according to ComScore, see Real estate Web traffic increasing).

But the portal is a bit of an anomaly in Real Estate 2.0. Rather than build much itself – it has instead focused its strategy on aggregating the best features from other Yahoo assets and around the ‘Net (listings from Pru, valuation from Zillow and eppraisal.com, foreclosures from RealtyTrac, etc. etc.), then wrap them in display advertising and leverage its cross-property traffic to drive pageviews (see A conversation with Michael Yang, General Manager of Yahoo Real Estate).

Their latest release adds content to a new Guides and Advice section, which layers in one more destination for that traffic to go on the site. (Full Disclosure: The new section incorporates content from Inman News, my employer, and I helped negotiate that relationship).

Unfortunately, adding more to the mix just means more of a schizophrenic experience on the site. With so many places to go – I find it, quite honestly, overwhelming and ultimately disappointing.

The sad thing is, Yahoo Real Estate, despite its impressive traffic numbers, has always felt like kind of an afterthought by the company – especially when placed against some of its more developed sections like Yahoo Finance. Which is why the news of impending layoffs must surely be troubling.

Sramana Mitra, writing over on GigaOm today, implores Yahoo to Please Put Up A Fight. He writes:

Yet another segment that is moving online is real estate classifieds. Borell Associates predicts that by 2012, newspaper real estate ad revenue will hit $3.2 billion, while online real estate ad revenue will surpass that at $3.4 billion. In 2007, total ad spending on real estate dropped 3 percent, but online advertising soared 25.8 percent to $2.6 billion due to a shift to online from print. Yahoo doesn’t have much of a presence in online real estate — ZipRealty is a ripe and cheap acquisition target.

Mitra is right on when she said that Yahoo hasn’t nearly captured what it could in real estate advertising – but misses the boat completely when she suggests that the portal should acquire ZipRealty. I doubt Yahoo has any interest at all in running a brokerage. Besides, that wouldn’t give them any slice of the advertising pie anyway.

If Yahoo is serious about acquiring a stake in online real estate (which, I can’t tell if is) – a better target might be a company like Trulia, who already has a business model in place to secure some of those classifieds dollars.

A move like that would require some serious re-jigging of their model but maybe that’s just what they need to do.