A Tale of Two Cities: Yahoo vs. Google

      

It’s rare for me to discuss an article in the Seattle Times or San Jose Mercury News, but a good friend of mine David Eraker, CEO of Mindsite and founder of Redfin, saw this one.  Great review of the relationship of Yahoo and Google and how the battle between Google, Yahoo, and Microsoft was foretold in nascent business development relationships from the early 2000’s. 

As someone who has spend a significant part of his career working the backrooms and lobbies for business development and corporate development (I am on the advisory board for the University of Washington’s Business Development Certificate Program), I thought it was a very interesting article of the power of good business development in terms of relationship building in the industry.  Clearly Google has been pretty tactical in their business development or corporate development activities over the past nine years.  It seems like that business development really set the stage for Google ascent to power.  In many companies, business development is an amorphous function that has limited power and limited ability to forecast landscape changes or drive new opportunities for the companies.  Companies that do not invest in business development (especially on the Internet) and enable business development professionals to drive revenue or change can really miss out on big opportunities. 

More on good business development to follow soon. 

HERE IS THE ARTICLE: Yahoo Pays the Price for A Good Deed to Google  

Zillow Launching Mortgage Offering to Compete with BankRate

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There is no doubt that BankRatehas the most powerful business model in the online finance world.  They have established themselves as the “gold standard” web site for consumers when checking interest rates on home mortgages.  BankRate provides objective information on interest rates and loans and then has rate tables where they list the rates from local banks and mortgage brokers.  Just like movie trailers, the best part of their business model is that the advertisement is the entertainment or the content that consumers are looking for.  Tom Evans and Steve Horowitz engineered an Internet Hail Mary for BankRate in 2005 when they shifted their business model from a paid listing business to a pay per click business that really scales with traffic.  Since early 2005, the BankRate stock has soared from about $10 to $40-50 a share.  It would probably be higher if not for the real estate and mortgage mess the country is facing.  Interestingly, BankRate is one of the only companies in the space that is not seeing wide spread defection from customers. 

Though it has been rumored for months, Zillow just announced that they are getting into the mortgage business.  It is unclear what the business model will be.  VP Jorrit Van der Meulen posted on the Zillow Blogthat mortgage brokers and banks can apply for FREE access to Zillow traffic.  Mortgage brokers have to pay a $25 application fee.  Limited additional details are available.  This is certainly an interesting opportunity for Zillow.  The Zestimates has been very powerful in the real estate industry enabling consumers to do some homework when considering refinancing their house.  Now it seems like Zillow is looking to either commoditize the mortgage lead generation players like LendingTree and LowerMyBills or go straight after the BankRate rate tables. 

Maybe they won’t charge the brokers for it and just make money from the advertising around it.   Zillow is a bold company.  They have taken the unusual approach of not charging the industry for advertising, but trying to surround the information with banners from Lexus and Pella windows.  The online real estate industry has always believed that best monetization of those eyeballs are from the real estate industry players (real estate agent, brokers, mortgage brokers, banks) and not the associated services. 

Zillow may just prove conventional wisdom wrong…  Or not.

Great Overview of Online Local Advertising Options

Here is a great run down of all the major models for local advertising and the current pricing of the major players.    It is probably the most comprehensive list that I have seen.  Note the variety of models from slotting (monthly subscription) to pay per click to pay per call to search engine optimization for a fee.  Take a look.

Internet Advertising Matrix