Yahoo emerging as substantial threat to real estate market

By Jesus Sanchez
Los Angeles Times

Yahoo Inc. is best known for its catalog of Web sites, free e-mail accounts and trademark yodel.

But Scott Gibson, president of Coldwell Banker's Los Angeles division, sees the giant Internet portal in a whole different light: He thinks it's one of the biggest threats to the established brokerage industry.

That's because Yahoo, through partnerships with fledgling online brokers, makes available to its more than 200 million monthly visitors the same real estate listings used by traditional agents. At the same time, Yahoo's partner brokers are undercutting rivals by offering rebates to home buyers and lower commissions to sellers than standard rates.

"Yahoo is a substantial competitor because they have the financial wherewithal to build up that site," Gibson said. "That's their business."

In fact, Yahoo has emerged as the second-most visited real estate site on the Web. It trails only Realtor.com, which is run by the troubled Westlake Village, Calif.-based Homestore Inc.

As Homestore officials have spent more than a year overcoming a series of legal and financial problems, Yahoo has beefed up its real estate services as part of a broader strategy to squeeze more revenue from the many people who use its portal.

In addition to selling ad space, Yahoo Real Estate generates fees from online brokers or mortgage lenders that are linked to the Web portal. Yahoo officials won't divulge any financial information about their real estate section, but it is considered an important element in boosting fee income and diversifying away from online advertising.

Yahoo's real estate expansion has not gone unnoticed by the real estate establishment.

Realtor.com is owned by the National Association of Realtors, the industry's dominant trade group, whose members include leading brokerages such as Coldwell Banker.

Last year the Realtors group proposed making it harder for customers of online brokers to secure unlimited use of local sales listings shared by association members — a proposal some analysts said was aimed at Yahoo Real Estate, which gained access to listings through its partnerships with member brokers.

Yahoo officials play down the controversy. But they make it clear that their company — which is licensed to sell property in several states — is in the real estate business for good.

"No matter what the rules are, we will adapt and go from there," said Ryan Roslansky, manager of product strategy for Yahoo Real Estate.