Social Networks, Fad or Future in Real Estate?

by THE WAV GROUP on April 21, 2008

As reported here,Chase International was the first known real estate company in the world to launch a Social Network tying a community of consumers, agents, and service providers together.  Given the number of brokers who have created accounts on the Chase site, I suspect that broker social networks will have a future in real estate.  Here is why.

Ning, the company that provides the social network technolgoy to Chase International and more than 250,000 other social networks is growing at a rate of 1000 social networks a day.

Recently, Ning closed a round of venture financing on $60 Million at a pre-money valuation of $500 Million, $560 Million post funding.  The funding came from institutional investors, also known as Smart Money, indicating that companies believe that Social Networks have a role to play across many industries to foster relationships between companies, partners and consumers.  With that level of funding, Ning will not be going away anytime soon.

Real Estate Brokers, Realtor Associations, and MLSs should plan to create a social network sooner rather than later.  Like many things online, the early birds get the best fruit and will have the most success.  If you look at the marketplace for Chase, although larger competitors Dickson and Coldwell Banker could launch their social networks today, they would need to advertise them aggressively to gain traction.  Chase is getting a lot of adoption and lift through PR that others will not enjoy with their ˜me too status.  Many web 2.0 analysts are joining the WAV Group on this perspective because of the issue of Social Network Fatigue.

There has been a lot of discussion about Social Network fatigue, and it is a real concern.  If you are a member of youtube, linkedin, facebook, gmail, twitter, flickr, blogger, inman, naymz and plaxo today (as I am), the thought of joining another social network is burdensome.  However, help is on the way in the form of Open Social – it will allow you to manage your profile across dozens of social networks seamlessly – make updates to one and they populate to all.

Here is our best guess for successful Social Networks in real estate.

One Broker will lead all others in their marketplace, and usually it will be one of the top 4 brokers in terms of agent population and transactions who is first to market – they bring a lot to the party with marketing support, lots of agent contributors,  lots of customers, and many vendors who will participate actively to ensure health in the strategic relationship they have with the brokerage and agents.

We predict that mid-sized associations of realtors will prevail over statewide associations or NAR (unless the state is relatively small like Rhode Island).  The content for social networks needs to be concentrated and localized.  A state like California, New York, Florida or Texas is just too big to offer a depth of information for everyone.  Social networks work more like tribes.  The terrain needs to be familiar, as well as the credibility of its contributors.  You might believe that the national approach would prevail by looking at the success of MySpace, Friendster and other global networks, but I would argue.  They are successful because they defined the paradigm.  But if you look closely, each of those networks represent a collection of small groups where everyone knows each other online and offline.  The social network is not the center of the universe, but rather a communications tool like telephones or email – only better.  Now that the social network technology developed by the pioneers is free for everyone (Ning), these groups will simply build their own☺

What do you think?  Leave a comment and let us know.

WAV Group consults with companies developing social networks.  If you need support developing your strategy, choosing a vendor or managing your social network launch, we would love to help.

 

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