City mulls over Zoopla’s uSwitch purchase and the effect of OTM

An analyst has said he thinks it possible but improbable that OnTheMarket will achieve penetration of two-thirds of the agency market.

Robin Capp, of investment bank UBS, was commenting on Zoopla’s acquisition of price comparison website uSwitch which he said should help drive significant earnings.

He said it would take only a “very small penetration of Zoopla’s traffic to produce significant revenue synergies”.

Zoopla has said that persuading just 0.2% of its traffic to switch would be worth £10m.

Capp told financial website Interactive Investor that Zoopla has been managing to slow the exit stream of agents departing to OnTheMarket and claimed that OTM’s numbers were “disappointing”.

OTM has not given a recent update on its numbers, but another analyst, William Packer of BNP Paribas Exane, estimates that nearly 25% of agents have now quit Zoopla.

Capp, who believes Zoopla is now worth 260p per share against his previous 225p target price, told Interactive Investor: “Our downside case assumes that gains significant consumer traction, disrupting the market and penetrating two-thirds of agents over time.

“Whilst possible, we believe that such a high level of success for the new portal is improbable.”

Interactive Investor says Zoopla lost nearly half its value in the tail end of last year, but its shares have since rebounded – currently to 215p, lower than its float price last summer of 230p.

The website says that Zoopla is expected to stay in the red until 2018, with debt expected to be £102m this year.

It also quotes Capp as saying he believes the housing market will stay buoyant.

He said: “Increased house prices and transactions should lead to larger agent marketing budgets [from which] we believe ZPG can benefit.

“We also see a continuation of the longer term structural shift in agents’ advertising spend away from newspapers and towards the internet.

“Investors do have concerns about the entrance of a new player (Agents’ Mutual) into the UK property portal in January.

“However we do not believe it will significantly disrupt the market in the long run.”

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  1. Typhoon

    He said: “Increased house prices and transactions should lead to larger agent marketing budgets [from which] we believe ZPG can benefit.  

    On the contrary. the agency world is at last waking up to the reality that to find real buyers and sellers, in reality they only need to be on one portal.  It’s interesting to see how Zoopla has recognised the danger they are under having lost so much business to OTM, . Even more interesting that we the agents have created their data base into which they will now vend their new services.

    1. danny

      Do you also create the database for google to vend their services into. They take our websites and create a tool that lists them and then sell advertising …to us… On the back of it . If your so incensed about this type of modelling are you planning to remove your website from google ?

      1. wilko

        So, Danny, are you going to put some of your “increased” marketing budget into Zoopla????? So you can naturally benefit from advertising your clients’ properties next to f.s ads, utility ads etc etc…..all designed to get your viewing public to look anywhere except at your clients’property???…………….Not really interested in discussing what you think of Zoopla are you? (even though this is a Zoopla article)??? Anyone want in on the sweep on how many times Danny will roll out his dire tribe against the other new portal???…….Not saying you can’t do that Danny, it is a forum as you often point out and you are entitled to be negative towards people for the sake of being negative……..

        I reckon 6-10 negative posts from you today.

        1. danny

          Why is it negative ? Its just factual. This is how google make money? Are you one of these people who read their own agenda into other peoples posts. It doesnt mention the “other new portal” ,you mentioned that ….. Also with your point to financial services and utility ads two things

          1) People chastise portals for making money out of estate agents, Zoopla try to diversify and you shout “how dare they”

          2) Im not nieve enough to think im the only person out there selling mortgages , life insurance etc. The average client will take a look around the internet, I understand that having them in one place offers a channel . I think its a smart business move and may offer me a revenue oppotunity in the future for selling gas,electricity ETC changeover packages. Obviosuly im not sure if thats their plan but thats what I would do in their shoes.

          Apologies if you thought my question was “negative” . I think you may be reading your own agenda into that

          1. Robert May

            Have you been given any detail of what is in it for you Danny?
            To make the point very real, let’s say  the sale of one of your properties generates a £500 switch commission, £250 from your vendor, £250 from the purchaser. who should rightly get what?
            Are you happy for Zoopla to cop the lot but not charge you for the service as the story on Friday seemed to suggest. How about you receiving 10 % 20 0r  25%?

            Perhaps you have detail but seemingly you are happy to generate income for someone else which is probably   at least 4 or 5 fold what you are paying in subscriptions.
            Perhaps you know the  Zoopla subscription will suddenly be free and are happy for them to benefit from your  introduction of clients.
            What is you know and what are you assuming?

            1. danny

              I know as much as you Robert, I know that they are a business and looking to make money…I sell moving packs at the moment but there is so little in them that we sell many as I can’t target my staff for them at sensible levels . Perhaps if Zoopla enter this market place it creates competition and a platform that I can sell more… Who knows

              1. Paul H

                “Perhaps if Zoopla enter this market place it creates competition and a platform that I can sell more… Who knows”…Excuse me if i’ve made the wrong assumption but are you an estate agent Danny or a jack of all trades? What precisely is your specialist subject, property, mobile phones or gas rates?

              2. Robert May

                Danny I understand your concerns about OTM but I can not understand you welcoming  anything so interconnected with your competition. Are you saying you are happy with a few quid knowing that it is a fractional part of what is being received?
                Once you sign up terms that effectively pass ownership of the client from  you and your agency to a 3rd party you  are losing any right to  the very many vertical sales thereafter. Let’s say you end up with £125 of a £500  utility switch,  what happens to the mortgage, the insurance every other  deals sold to your former client both now and in perpetuity?
                Do you not think it a coincidence that  quite so much money is being ploughed into online agency,  much of it by the people who invested in Zoopla in the first place.  It wasn’t a story covered by Ros but in January  Simon Murdoch invested a wedge in Emoov.
                The story  admits  they don’t need many to be profitable, that should tell you one thing, it is lucrative.
                Not only are you effectively providing the Glasses guide data that attracts homeowners, those thinking of moving you are effectively signing your own death warrant.
                The one other portal rule is a godsend to Zoopla, it is preventing agents like you and EHenderson from joining Agents Mutual. I  really don’t know how to make this any clearer, you are asking a stranger to hold your wallet so you can chase a quid rolling down the road.
                Agents Mutual is a good thing for your agency even if OTM and its restrictions are not.

                1. danny

                  Your inferring that Zoopla will be an online agency moments after investing £180 million in a different business vertical ? Infamy ,infamy etc etc

                  1. Robert May

                    No I am not Danny, read it slowly. At £500 just for switching  utilities why bother with the  agro of  listing and selling property?  Grabbing £500  off the back of someone else doing a heap of work is far more  efficient.

                    What I am trying to tell you is how your ability to win instruction  could be used by 3rd parties long after you have  completed a deal or lost an instruction.It just seems a bit mad  for a business owner to pass such income to someone else.

  2. EHenderson

    OTM will need to drop its silly ‘one other portal’ rule to get the level of success its members need to justify their investment.

    Until then, they will stagnate both in terms of traffic and membership numbers.

    1. PeeBee

      Ahhh… you’re back.

      Care to answer my questions from last week, EHenderson?


      Pwetty pwease?

      You know, it isn’t ladylike to ignore polite requests…

    2. wilko

      And Ehenderson is also fast out of the blocks today(narrowly beating Danny) with his “stock” opening comment (nothing really to do with the article as usual) to try and rile up the forum. Pathetic, in my view.

      1. Woodentop

        PeeBee you live in hope, this guy fires blank in an industry he knows little about.

        1. Robert May

          Ehenderson  said back in January she is a Miss 😯 She does know about the industry and as said she would join AM if the one other portal rule didn’t exist.
          She is a different to Danny who seemingly doesn’t have a desire to join AM.

          What Ehenderson is reinforcing is her objection to joining AM.

          1. Woodentop

            Robert are you sure its a woman who knows about estate agency? While I accept it could be a woman, the statement they come out with on varied subjects do not match that of an experienced estate agent.

            1. EHenderson

              Woodentop, Robert May, Wilko, PeeBee & Paul H.

              The 5 of you seem to dominate the comments in these forums, but your thinking is short sighted and parochial.

              Just reading your entries here it is very clear that you represent the minority of our industry that refuses to move on.

              Paul H: ‘Zoopla is expected to stay in the red’. I’m not actually sure that you understand the facts behind this statement. You just have to look at their results to know they are highly profitable (much to my annoyance) – although not as profitable as Rightmove.

              Wilko: ‘with his “stock” opening comment’. I’m not bothered that you mistake for a man, but you read pretty riled to me!

              Woodentop: ‘the statement they come out with on varied subjects do not match that of an experienced estate agent.’. If, to sound like an estate agent i have to doggedly put my support behind a fundamentally flawed business plan and mediocre exdecition, then you are correct, I do not sound like an estate agent.

              Robert: ‘I can not understand you welcoming  anything so interconnected with your competition’. Are you joking?! You spend most of your time trying to persuade me and others to invest in a portal that is co-owned by my competitors and which wants to dictate my marketing strategy to me.

              Peebee: give me strength


              1. Robert May

                That isn’t correct E,  as I said to Danny, I understand why OTM and restrictions isn’t right for your business and it is the dictation of marketing strategy that would prevent me from joining too. I am not trying to get you to join OTM and abandon your marketing I have only encouraged you to express your objections  and sought to be fair and balanced with you.

                If you like Danny want to pass up the up sell opportunities to someone else you are more than welcome to do so. Others will be a bit perturbed by their data  being hawked about like porn behind the bike sheds.

              2. PeeBee


                Ms Henderson…

                Now that I have at best some of your attention, I once again respectfully request that you explain to me what you possibly gleaned from the post last week that provoked you to label me ‘a moron’.

                Of course, you may well state that it is a culmination of posts that has brought you to that opinion  – in which case again I look forward to enlightenment as to what reasoning you have for such a statement without substance.

                You state above “Give me strength”.  Fair comment – you certainly come over like you need strength.  Good on you for admitting it.  Sorry – but I can’t actually ‘give’ you any – although if it were in my power to do so than believe me I would – I do my best to help those that need help most.

                You could of course try Sanatogen for starters; eat plenty of greens, and red meat.  Certain carbs will also help – but choose carefully – you know what they say – “a moment on the lips…”

                Oh – and drink plenty of milk.

                NOT gin.

                As can be seen by all here you’re not an amiable person when you’ve had a few too many and take out your frustrations on the EYE audience in your inimitable style…

                1. Robert May

                  Is that fair Peebee?   Gin tends to induce depression rather than waspishness. Several of us had a chuckle at that unexplained outburst last week and along with this latest swing at the famous 5, it just gets funnier.
                  Can you imagine how  I can possibly have gone from  AM’s  Voldermort last summer to the point where suddenly I’ve replaced Paul H as chief  unofficial protagonist?
                  I have to suspect my observations are leaving  E will the uncomfortable realisation that she might be one of the Copper and Tin members who has every good reason not to join OTM but a pressing need to support  AM.
                  Let’s hope she isn’t a Zoopla user  reliant on a cloud based SAAS system who has unwittingly signed away protection of her  crown jewels data to 3rd party  data analysis & sharing and therefore  in  most need of  the leverage of  a  powerful  affinity group to help  get things sorted.
                  The most ironic thing about this latest  pop is the fact that I sit so firmly independent of everything that I  get grief from both sides.
                  I have to say I like EHenderson, I can see exactly where she is coming from and have commented she makes good sense.  I even invited her to get in touch to help assess   future that allows her to be do what she does along side the AM Collective such as you  (tops trumps irony?) Perhaps the frustration towards AM members and me is the angry bit ahead of acceptance and implementation.  To bring the post back on  topic to prove Robin Capp wrong AM has to find a way of attracting Agents like Danny, EHenderson and the other notable abstentions from the project.

                  1. PeeBee

                    Well, Robert – now you’ve got me flummoxed.  The only possible explanation I had for EHs bad-mannered outbursts was the demon drink – I know what it does to some people and it usually ain’t pretty – but you got me thinking last night about other possible causes.

                    This one’s a long shot – but I’ll bounce it off you.  Could it be some form of alternative courtship ritual?  I’m a bit behind the times on these things but is this possibly EH taking ‘playing hard to get’ to the complete next level?  Looking at the facts – she teases me with some d!rty talk (calling me a “moron” could be, to her, a term of endearment, I guess…); then she runs off all coy and expects me to be the gentleman and do all the chasing.  Note that I even had to ask “pwetty pwease” twice before she responded – and that was just to kick a little more sand in my face.

                    ‘Cat and mouse’, perhaps?  Or some kind of Estate Agents’ courtship ritual – “You overcome my objections and I’ll show you my imposing features…” sort of thing?

                    One way or another – I guess we will have to wait until the next Zoopla-related story to bring her out into the open once again…

                    1. Robert May

                      Do you know how hard that post is to reply to Peebee without  jumping into the hole you have started to dig?

                      Think about the core membership of AM then the radiated Gold, silver and bronze members I can’t think of a prominent member agent who does not fit a fairly tight  lounge suit profile.

                      The affinity group I envisaged back in 2010/2011 ought to represent the full spectrum of Estate Agents, the full spectrum of Agency owners and  the full  spectrum of properties for sale or to let. I am struggling to see that AM does that and how that is going to be achieved without change.

                    2. PeeBee

                      Sorry, Robert – I was more ‘thinking aloud’ than expecting you to pick up the shovel and help me dig! ;o)

                      For what it is worth, I agree with you 100% regarding the “full spectrum” coverage – as I have posted from the very start of the AM/OTM issue.

                      As a Member firm I will back OTM to the hilt – but that does not stop me having issues with the Ts & Cs and their effect on the industry.

                    3. Robert May

                      It wasn’t ever a case of me helping you dig, I didn’t want to be close enough to the edge when the sides fell in.

                      Everyone has had equal opportunity to join AM but not everyone has. Those that haven’t joined  for a perceived reason are likely to see their prerceptions reinforced.


                      Can you tell I am really really hedging my comments on  the preceived make up of AM that goes beyond property type and client profiles. Some people will  feel excluded even though AM is by name and nature mutual  and fair.

              3. Woodentop

                Actually you make a lot of biased and hot air over things not OTM related, which for someone who says they work in the industry shows up as being very suspect, pretending to be someone you are not comes to mind.

                1. Robert May

                  The  thread format makes it difficult to know to whom you are referring  Woodentop.

                  1. PeeBee

                    I’m possibly being optimistically presumptuous here, Robert – but I’m kinda hoping it ain’t little ole’ me that woodentop’s referring to…

                    1. Robert May

                      That is two of us, hence the observation.

    3. Paul H

      EHenderson said…”OTM will need to drop its silly ‘one other portal’ rule”

      What you mean the rule that’s meant that….”Zoopla is expected to stay in the red until 2018, with debt expected to be £102m this year.”

      Seems like the one other portal rule is working to me don’t you?

      1. 1stTimeBuyer

        True, but missed the minor detail that Zoopla just brought a business for £160 million, my math tells me that excluding this is + £58 million.  Anyway, this purchase brings with it an extra £20 million in profit I believe (from the article).  Sounds like they are really struggling…

        1. wilko

          1st time buyer…..”Sounds like they are really struggling…”……if they weren’t struggling (as a property portal) then why would they spend £160million on a company that has nothing to do with advertising property for sale????… the clear detriment of their advertising members who would have been infinitely better off if they had conducted a £160million TV advertising campaign to encourage the public to use their portal which, in turn, would create more buyers and sellers for them?

  3. followme


    I believe this is just the move that you would expect of a company driven by the stock market, it has to be done to keep the appetite of investors! A company directed by a family or principal would have not got in to this state. They would have invested in its core values and developed it relationship with its customer base!


    So why act surprised to see Z attempting to extort new income streams, it works for them!


    Question; what do OTM have to do to attract more of their business away from Z?


    Z and RM deliver something currently better than OTM but let’s give OTM a bit of time, I mean 4 months and they have taken over the world yet, what do you expect!


    Why are estate agents supporting Z, they attack your business when you leave, they have not continuity of fee (if you haggle well, you get a better rate) and they are breading the rise of online and subprime location agents! This now topped up with a Tesco style ‘we can do everything’ service, has to be the final straw for any intelligent agent!  


  4. GPL

    ANALysts?… that’s the stock market equivalent of “the weather next year will be….”

    Here’s a genuine story… Years ago I was asked to value the house of a very well known Physic/Fortune Teller…. when she opened the door to greet me I jovially said “so, why am I here?…. surely you know what its worth and when it will sell?”… that’s was my opening salvo….. Happy Days!

    ANALysts, Physics/Fortune Tellers…. ? I’ll get on with Estate Agency!…. would have been good if The Duopoly had done likewise however we can at least now see behind their magic curtain…. it’s all smoke n’ mirrors. Each month they take your admissions fees and perform their magic tricks… not for your benefit, for theirs!

    Roll on Halloween.. I’m dressing up as Zoopla or Rightmove!

  5. Robert May

    Robin Capp hasn’t quite got this figured has he? Zoopla is a service provider, it doesn’t have any customers other than its agents.  Zoopla can not  leverage a single £0.01 without sanction from its paying customers. To do so would be like an undertaker nicking  gold teeth and grave goods.

    Zoopla  can reasonably take a percentage from supplying the service but the lions share of income is due to the agents who created the opportunity.

    It is possibly a good thing Zoopla can  earn from a tiny penetration, that is exactly what they could end up with.


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