It goes without saying that the industry took notice last week when two major Internet listing services (ILSs) got together, with PRIMEDIA’s purchase of Rent.com from eBay.com. The merger brings Rent.com, known for its pay-for-performance model, together with PRIMEDIA’s ApartmentGuide.com, Rentals.com, and RentalHouses.com. Apartment owners and watchers expect the union to bring plenty of changes down the road. Here are five things in particular to look for:
1) A rejuvenated brand:The perception from a number of people in the apartment industry, whether true or not, was that eBay had overlooked Rent.com, making it a “stagnant” brand. Most observers expect that to change. “Long term, I expect it to be positive,” says one observer, who declined to be named. “Primedia is dedicated to the space, and Rent.com was clearly not considered by eBay to be a jewel in their crown. So more management focus should be a good thing.”
2)Internet visibility:Jamie Gorski, senior vice president of marketing at Greenbelt, Md.–based Bozzuto Group, says her company is moving away from ILSs and focusing instead on optimizing searches for its own sites. While the PRIMEDIA–Rent.com merger won’t change that strategy, it could possibly provoke second thoughts among owners who are solely focused on increasing their Internet visibility internally.
3)Model differences:ApartmentGuide.com and Rent.com compete but with different models. ApartmentGuide has a subscription model, whereas with Rent.com, customers pay for results. “The first thing that’s going to come out of this is the opportunity to more selectively target what’s right for a particular property and a particular time using a single point of contact,” says Steve Lefkovits, president and CEO of Emeryville, Calif.–based Joshua Tree Consulting. “For some properties, a subscription model works, and for some, a pay-for-results model works.”
4)TPG’s presence:Lefkovits thinks the presence of private-equity firm TPG Capital, the owner of PRIMEDIA, will have an impact. “They attract and retain the best of the best of the best in terms of talent,” he says. “It’s not just bringing together these two companies, it’s actually bringing in a third company that has an outstanding reputation and all of the minds and talent they can bring to bear in helping to provide for a better customer experience in our little niche.”
5) New start-ups:With any merger, there are always people who are either let go or just decide to strike out on their own. “Out of any merger comes an opportunity for people who want to do their own thing to go off and do their own thing,” Lefkovits says. “I’m sure there are bright, innovative people in both organizations who will go out and pursue their pet projects. I think that’s also going to be good for the industry.”