Hi, I've mentioned quite often that I post sporadically on Active Rain. Why? I am always afraid of being inundated by comments from a very enthusiastic loyal corps of AR bloggers... and I think very highly of the community because of this. My problem is I can only respond during certain hours of the day due to my busy schedule, usually between 9:00 and midnight.
In any case, I did post my thoughts on the Active Rain / Move.com imbroglio over at Transparent Real Estate. Feel free to leave comments (I do learn a lot from them, I just unfortunately sometimes can't reply in a timely manner) at either site.
Here's the first part of my post:
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Watching the Active Rain / Move.com imbroglio from the blogosphere sidelines has been fascinating... here's a strategic take on how Active Rain can move forward:
Active Rain's Asset
Active Rain has one asset that differentiates their social network from any other real estate site: it owns the bloggers. This core group of real estate professionals represents the social networking hubs, the influencers that are prized by viral marketing advocates. They are intensely loyal to AR and in aggregate, the voices of these bloggers have been underestimated because the consumer has yet to discover their existence.
If you believe blogs and other Web 2.0 constructs will eventually be adopted as the new marketing platform for agents (and we think so), a real estate futurist has to project when consumers will realize that blogs and blogging agents are go-to sources for their transaction needs. From this perspective, AR's management may be premature in selling AR because the market that will develop between the bloggers and consumers hasn't happened yet. Facebook's Mark Zuckerberg famously did not sell out to Yahoo for $1 billion last year, and then re-created Facebook this spring with its wildly successful F8 platform and established legitimacy across the masses beyond its college ranks (and now it's contemplated to be worth about $10 billion ).
AR may potentially evolve as a smaller real estate Facebook story - leverage their network by providing the membership with ways to develop lead generation and revenue opportunities, and traffic will increase. But it does have a few hurdles to overcome.
Active Rain's Challenges
1) AR owns the bloggers, who owns the content?
A lot of commentary running through AR on this, but I consider this is a non-issue as long as AR sustains credibility with bloggers (and I think they will based on history). The mutual and beneficial co-dependence between Active Rain and its authors will continue to provide value for both sides: for AR, enhanced value based on traffic and for the bloggers, online presence and potential lead generation.
References:
Reaping The Fruits Of Others’ Labor? Or Adding Value To It? - 3Oceans
Elephant in the Rain - CEO Jon Washburn's response to AR's relationship with its network
Here are the four main problems facing AR that need to be addressed in order to qualify for expansion capital. It goes without saying that AR needs to address the standard criteria universally used for venture capital investment - business model, traction, competition and management.
2) Developing the proforma revenue model - all RE 2.0 properties from Zillow to Trulia grapple with the dearth of immediate cash flow and are on spec with their investors to eventually monetize on advertising as opposed to transactional revenue. What's important is the direction of the business model, and AR needs to address how to build the consumer traffic that will create the demand for advertising from RE professionals who want to access consumer leads. I should mention that sites like Realtor.com and Housevalues have been able to demonstrate preferred ad placement and lead selling revenue models, but are not proving that these models will be acceptable to agents going forward as less costly Web 2.0 alternatives are adopted (see Housevalues stock price chart below).
3) AR needs to augment their relatively puny consumer traffic. The Quantcast comparison graph below illustrates what real estate bloggers already understand - consumers comprise an overwhelming majority of traffic to real estate sites but they still don't know about the existence of blogs and bloggers, including Active Rain.
4) Management - Although AR's management deserves kudos for successfully creating a compelling and growing network property, the latest faux pas with Move.com exposes some management inexperience. I'm all for transparency, but even the online exposition of lawsuit documents puts both management teams in questionable light. Venture capitalists tend to invest in proven internet startup management, and will want to reshuffle management. Investors also shy away from dirty laundry.
Reference: Where's Caleb? - is an indication that AR has been great training for greener pastures.
5) Competition - forget the new real estate social networking sites that are popping up everywhere... the biggest Real Estate 2.0 fish - Move.com with their blog platform, Zillow and Trulia with their Q&A products - and soon, the brokerages will play the blogging/social networking game and capture "market share" of bloggers away from AR.
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In the second half of the article over at Transparent, I discuss what Active Rain should do. Please continue there... (thx!)
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