REA’s business model is under threat

Livewire Exclusive

It’s not just traditional companies that are struggling to face up to the threat of disruption, tech companies must deal with this too. At the recent Livewire Live investor forum in Sydney, Daniel Petre, Founder of Airtree Ventures, identified REA Group, Fairfax (owner of Domain), and Seek being businesses facing disruption. “We all know in the tech sector that the idea of paying to list in classifieds is stupid. Why should I pay $6000 to list a bunch of bytes on a server, where it’s costing that service a cent, or near-zero. It’s just mental. Around the world, paid listings online are going away and it’s all paid-for-performance.” He thinks Seek is handling the changing market more effectively through moving into different geographical areas and diversifying their revenue streams, however he was less hopefully about REA. “REA is built on paid-for-listings, yet the REA would know that model is going away.” Watch the video below: Or watch the full panel session here: (VIEW LINK)


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Simon Carson

Hmm ... Daniel Petre is smarter than me, but the cost of serving bytes seems irrelevant. Pricing is set by optimising demand and supply, not the cost to serve. I expect Zoopla drove Right Move to a pay per lead, so until someone does that in Australia, I don't know why it needs to happen.

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