Anyone under the age of about 25 would likely be confused when someone mumbles the words ‘MSN Messenger’.
But for those of you of a similar age to myself, it likely conjures up feelings of nostalgia – late nights talking to friends over a super slow internet connection that could drop out at any moment – all thanks to a family member making a call on the landline phone.
MSN Messenger, ICQ and other viral messaging apps were how we communicated online throughout the ’90s. There was no such thing as iPods or iTunes to easily drag-and-drop our music into a playlist. Our playlists took considerably more effort. We had to stay up late at night holding down play and record on our tape recorders hoping our favourite song would be played on the radio, all the while keeping a pencil close by just in case (and if you understood the pencil reference, we just became best friends).
Then, in the early 2000’s, starting with MySpace in 2003 and Facebook in 2007, social media completely took over. All of a sudden, the world went from ‘one to one’ or ‘one to a few’ communication, to ‘one to many’ communication. Instead of chatting with one of your friends, or a few, at a time on messenger applications, we suddenly became a society of broadcasters. We went from sharing our special moments with just a few to telling everyone we knew about everything we did – all the time.
When it came to content creation, we no longer had to wait 24 hours (or more) to get our photos developed. We could instantly review the photos we took, on our phones, and immediately broadcast them to the world. Smartphones suddenly gave everyone a TV camera and a TV station of their own in their pocket.
But as with most things over time, what’s old is new again. And how we communicate and buy things is fundamentally changing yet again.
Recently, Facebook founder and CEO Mark Zuckerberg confirmed that the company is merging Instagram, WhatsApp, and Facebook Messenger to create a new, interconnected, “privacy-focused” social network. This has gone largely unnoticed here in Australia but, make no mistake, this is very big news and has huge potential consequences for all businesses and service providers in all industries.
Zuckerberg has stated publicly many times that his ultimate goal is for Facebook to be the conduit for global communications – to build a more connected world. And there are only two channels of communication bigger than Facebook today:
In the US, Facebook has seen 15 million people delete their accounts and Instagram is the only growing social network. Facebook’s core philosophy for many years has been “make everything public”. Zuckerberg believed that a public world is a more connected world, but we now know that not to be true. Social media is easily manipulated and distorted.
But hey, Zuckerberg is a smart guy so just maybe it was his plan all along to sell ads against all that content people were posting? A means to an end? Or quite possibly, it was all an elaborate ploy to eventually build a very different business model altogether.
In 2014, Snapchat founder Evan Spiegel claimed that Generation Z and young people, in general, prefer the “phone book” model of communication, where instead of trying to build an audience, they seek more intimate connections and share with a few “real” friends rather than many “pretend” friends.
With the merging of WhatsApp, Instagram and Facebook Messenger, Zuckerberg and his team are indicating they believe this to be true as well. The age of broadcast communication is slowly dying.
It’s not just how we communicate that Facebook is aspiring to change.
The way we buy things, possibly including real estate, is also in Facebook’s sights to fundamentally transform.
Facebook is a company just like yours and, just like you, Zuckerberg wants his business to keep growing. But if Facebook is to keep growing, they’re going to need to build an audience where they’re weakest – in Asia.
Asia’s answer to Facebook is WeChat – a much more sophisticated and integrated social, commerce, entertainment and communication platform than Facebook is right now – plus it has 1 billion daily users.
WeChat allows people to virtually ‘live’ inside the app. If Facebook wants to grow in Asia and in other countries as well, then WeChat is the model and Facebook are making signals that it’s a model they’re looking to adopt.
Facebook shares have taken a hit in recent years after a series of scandals involving privacy and data sharing concerns, and as a business, they need to look at new revenue models and new industry verticals – so the WeChat model makes a tonne of sense.
How will this impact all of us?
Firstly, as consumers, the placement of advertising inside Facebook is going to see a shift toward more ads inside messaging applications. Within your private communications, you’re going to be more personalised ads.
Secondly, I believe we’re going to see marketplaces for specific services within the Facebook ecosystem with ‘tap to pay’ functionality – similar to Facebook Marketplace, but for businesses to promote their products and services from their Page. Facebook recently announced the launch of their own currency which is a signal of their desire to become a global storefront like Amazon.
Some are also predicting that Facebook could diversify revenue beyond advertising. For instance, it could take a commission, whether for newspaper subscriptions, food deliveries or connection services much as Apple already does with a cut of up to 30 per cent for app payments.
Thirdly, we could see traditional communication companies and email providers become less relied upon or even obsolete. If Facebook’s new messaging services are the preferred method of communication for both people and businesses, for email, voice and text communications, then this is a very real threat to the current business models of our major telecommunications providers.
As Facebook builds out this new messaging hybrid service (Instagram, WhatsApp and Messenger) and super fast 5G networks are rolled across the world, telcos may be simply relied upon for their data services only. Meaning their revenue related to actual communication services, phone and SMS, could dry up completely.
What does this mean for real estate?
If Facebook goes down the WeChat path, and Australian’s buy into the model, then it’s not a stretch of the imagination to think that all of the major and minor property portals may simply become vendors inside Facebook’s ‘Marketplace For Businesses’.
While Facebook has traditionally been ‘free’ for businesses to create a Page, real estate businesses and agents could be forced to pay to have a presence on the platform.
Or, wait for it… we could see Facebook provide a real estate portal themselves – for real estate businesses to advertise directly on Facebook in a standalone property search portal within the platform. This is obviously the big disruptor to traditional portals that so many real estate businesses have waited, and hoped, for. And they’re already hinting at this approach.
In an article published on Facebook’s news page on 19 March 2019, it reads:
“We’re building a tool so you can search for and view all current housing ads in the US targeted to different places across the country, regardless of whether the ads are shown to you.”
In trust Facebook style, the message is not 100% clear on what they’re building but what’s interesting are the words “a tool so you can search for and view all current housing ads”. In other words, a tool to search for all available properties – a property portal. And while they’re not saying anything about a global roll-out yet, it could only be a matter of time before Australians can access this tool as well.
It’s been widely believed that the big property portals will employ agents at some point, but if agents could suddenly go straight to the consumer on Facebook’s “property portal”, this would put a full stop to that rumour.
Would this spell the end of our major property portals as we know them? Probably not. But remember back in the late 90’s and early 00’s when Foxtel was a gazillion dollars per month with a 36-month contract? Enter Netflix, Stan, Fetch TV etc.
Foxtel is now clambering to hold onto market share with no lock-in contracts and a much cheaper monthly subscription. All of these new streaming services didn’t kill Foxtel, but they sure made an impact on its revenue. Netflix and co. offered a completely different experience and fundamentally changed consumer behaviour seemingly overnight. All of a sudden, people had a completely new way to consume entertainment.
Should Facebook go down the path of developing this hybrid model of social networking, communication, commerce, news, entertainment and possibly even real estate, we could see a similar story unfold for our industry. It has the potential to fundamentally change how consumers use the internet to search for property and while it might not be a portal ‘killer’, it could certainly force them into a similar position to Foxtel – lowering subscription fees or bundling packages together to hold onto customers.
If there’s one thing Australians love as much as scrolling through Facebook (and there’s 18 million of us who do), it’s talking about real estate. As millennials and generation Z start to get older, we may see these two things finally merge together inside one mega platform. And, just like what happened to Foxtel, this upcoming generation may seek an entirely new way to consume content – including searching for real estate.
So if you’re asking the question “how can we build a competitor to the major portals”, you’re probably asking the wrong question. Facebook might already be working on it. And in true Facebook style, we may not know about it until it’s here.
Plus they have way more cash to invest in seeing if it works than every real estate business, and the major portals, combined.
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