What Active Rain should do now

Watching the Active Rain / Move.com imbroglio from the blogosphere sidelines has been fascinating... here's a strategic take on how Active Rain can move forward:

Active Rain's Asset

Active Rain has one asset that differentiates their social network from any other real estate site: it owns the bloggers. This core group of real estate professionals represents the social networking hubs, the influencers that are prized by viral marketing advocates. They are intensely loyal to AR and in aggregate, the voices of these bloggers have been underestimated because the consumer has yet to discover their existence.

If you believe blogs and other Web 2.0 constructs will eventually be adopted as the new marketing platform for agents (and we think so), a real estate futurist has to project when consumers will realize that blogs and blogging agents are go-to sources for their transaction needs. From this perspective, AR's management may be premature in selling AR because the market that will develop between the bloggers and consumers hasn't happened yet. Facebook's Mark Zuckerberg famously
did not sell out to Yahoo for $1 billion last year, and then re-created Facebook this spring with its wildly successful F8 platform and established legitimacy across the masses beyond its college ranks (and now it's contemplated to be worth about $10 billion ).

AR may potentially evolve as a smaller real estate Facebook story - leverage their network by providing the membership with ways to develop lead generation and revenue opportunities, and traffic will increase. But it does have a few hurdles to overcome.

Active Rain's Challenges

1) AR owns the bloggers, who owns the content?

A lot of commentary running through AR on this, but I consider this is a non-issue as long as AR sustains credibility with bloggers (and I think they will based on history). The mutual and beneficial co-dependence between Active Rain and its authors will continue to provide value for both sides: for AR, enhanced value based on traffic and for the bloggers, online presence and potential lead generation.

Reaping The Fruits Of Others’ Labor? Or Adding Value To It? - Kevin @ 3Oceans
The Duplicty of ActiveRain.com - Brian Brady on Bloodhound
Elephant in the Rain - CEO Jon Washburn's response to AR's relationship with its network

Here are the four main problems facing AR that need to be addressed in order to qualify for expansion capital. It goes without saying that AR needs to address the standard criteria universally used for venture capital investment - business model, traction, competition and management.

2) Developing the proforma revenue model - all RE 2.0 properties from Zillow to Trulia grapple with the dearth of immediate cash flow and are on spec with their investors to eventually monetize on advertising as opposed to transactional revenue. What's important is the direction of the business model, and AR needs to address how to build the consumer traffic that will create the demand for advertising from RE professionals who want to access consumer leads. I should mention that sites like Realtor.com and
Housevalues have been able to demonstrate preferred ad placement and lead selling revenue models, but are not proving that these models will be acceptable to agents going forward as less costly Web 2.0 alternatives are adopted (see Housevalues stock price chart below).

3) AR needs to augment their relatively puny consumer traffic. The Quantcast comparison graph below illustrates what real estate bloggers already understand - consumers comprise an overwhelming majority of traffic to real estate sites but they still don't know about the existence of blogs and bloggers, including Active Rain.

4) Management - Although AR's management deserves kudos for successfully creating a compelling and growing network property, the latest faux pas with Move.com exposes some management inexperience. I'm all for transparency, but even the online exposition of lawsuit documents puts both management teams in questionable light. Venture capitalists tend to invest in proven internet startup management, and will want to reshuffle management. Investors also shy away from dirty laundry.

Reference: Where's Caleb? - is an indication that AR has been great training for greener pastures.

5) Competition - forget the new real estate social networking sites that are popping up everywhere... the biggest Real Estate 2.0 fish - Move.com with their blog platform,  Zillow and Trulia with their Q&A products - and soon, the brokerages will play the blogging/social networking game and capture "market share" of bloggers away from AR.

What Active Rain should do point by point:

1) AR owns the bloggers. Open up their closed garden network to the brokerage community who own the consumer eyeballs. Here's the idea: brokers will soon figure out they want their agents to blog - to them, blogs are the mark of an ambitious agent and will enhance the broker's profile, even if the blog resides outside the broker website (which, btw, is usually fine by them). Position Active Rain as "blog lite" - a first step to the blogosphere that it actually occupies now, and work together with brokers to get their agents up and running on their own individual blogs under their own domain names. Why? With all the discussion about "who owns the content", let's just admit that it's best for the blog authors to own it on their own sites for the rest of their career. Second, if AR somehow can help the broker build their own blog-enabled websites and educate their agents to blog, AR will have a tangible reason for a relationship with the brokers, which it doesn't seem to have now.

Blog content can be distributed to more than one blog or website... most bloggers with individual blogs (including me)
post duplicate content on our blogs and on AR. I won't go into the details, but this kind of limited duplicate content distribution can be performed safely without search engine penalty risk. AR can position itself as one of the distribution hubs of real estate blog content and increase both its own online visibility and that of its network. Details of this kind of content network (I'm implying that AR could suddenly and surprisingly look a lot more like Inman with a hyperlocal focus) require more strategic thinking along the lines of partnerships with brokers and other data delivery purveyors... I can detail the above ideas more fully later.

2) Although the business model needs a rework, AR is in the position to fix it "on the job". The key factor is management's willingness to think outside the box and position AR as a cog, not an independent blog fiefdom, in RE 2.0 and open up aggressive strategic discussions with other players. AR doesn't urgently need capital to pursue initiatives, it needs a one-year strategic plan that, after execution, will develop a higher evolved business model prerequisite to investment. And along the way, strategic partnerships tend to breed investment opportunities anyway.

3) The strategic plan must include a path - content network, data delivery, innovative content exposure, viral marketing campaigns, partnerships - to connecting bloggers with consumers.

Update 9/30/07:9:20 - AR also needs a web design strategy to attract consumers:

The problem is that AR is a platform for realtors to talk to other realtors - it is virtually unusable for consumers.

Have you ever gone to the site with a consumer's point of view and tried to find useful information about a location or issue you may be interested in? The site is a mess when it comes to finding valuable information, and at the end of the day isn't that what a blog is all about - providing information. I assume Localism is their attempt at creating a consumer facing site, but it's as poorly designed as AR.

From comments by TJ

4) Management is at a flash point. Management must assess whether they can make that sea change in strategic thought - think like Facebook, think like Digg, think like Google, think like NRT - to grow a social network that fortunately seems to have charged ahead on auto pilot up to now. A quick sale on the heels of the lawsuit seems unlikely,  particularly because it exposes the weaknesses in AR's business model and management, and the fickleness (just watch the comments) of its social network (
the failure of pioneer social network Friendster is a good example of that fickleness).

The lawsuit makes AR look vulnerable, and competitors will now try to carve away AR's bloggers one-by-one (and there seem to be an uber-involved AR-rati of only about 200) by offering the new lead generating services that AR must now develop in their new business plan. Zillow and Trulia are pumped up with new capital and they have gained product experience with services that connect the agent and the consumer.

I should mention I applaud Active Rain management for
elevating AR to the heights it has reached, and find it difficult to be critical. But I see this crisis as a defining moment that happens with every successful internet company... Zuckerberg's was turning down $1 billion. AR requires an energetic response befitting an animal that suddenly got caught cornered. I believe they have a lot more value than they've even thought of leveraging so far for the reasons given above, and it will be exciting to see how they can rebuild their value proposition.

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(disclosure: Domus Consulting Group consulted with Trulia on Trulia Voices)


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  • 9/30/2007 8:12 PM TJ wrote:
    It doesn't matter what ActiveRain's business model is if they don't seriously increase their consumer traffic. The problem is that AR is a platform for realtors to talk to other realtors - it is virtually unusable for consumers.

    Have you ever gone to the site with a consumer's point of view and tried to find useful information about a location or issue you may be interested in? The site is a mess when it comes to finding valuable information, and at the end of the day isn't that what a blog is all about - providing information. I assume Localism is their attempt at creating a consumer facing site, but it's as poorly designed as AR.

    My advice to AR is to find a good web designer - someone who really understands the user experience and how to store and present information in a useful manner. I'm assuming the useful information is in the site somewhere, but consumers can't find it.

    Make it easy for people to find what they need and maybe they'll start to grow traffic. It ain't happening now.
    Reply to this
    1. 9/30/2007 8:19 PM Pat Kitano wrote:
      Precisely Tim... a complete change in strategic focus from the blogger to the consumer has to happen at AR. Your comment encapsulates stage 1 of the AR makeover to come... management has to act now.

      Reply to this

  • 9/30/2007 8:47 PM Kevin Tomlinson wrote:
    AR has what all those other sites crave & need: agent membership.

    I smell a merger.

    I just realized---whatever happened to Friendster?
    Reply to this
    1. 9/30/2007 9:29 PM Pat Kitano wrote:
      Kevin, you're one of the AR-rati... agent membership and loyalty are fluid... if Zillow, Trulia or any other innovative RE2.0 property offers a better deal, they create their own Zillow/Trulia-rati. One thing these companies underestimate is the power of owning the bloggerati... I think they are up for grabs now.

      Friendster is a great illustration of how to become a has-been in the social networkng space and a good reminder to pin up at Active Rain's office bulletin board... read the NY Times article....

      Reply to this

  • 9/30/2007 9:43 PM Laurie Manny wrote:
    Thank you Pat for being the voice of reason in this sea of insanity.

    "The problem is that AR is a platform for realtors to talk to other realtors - it is virtually unusable for consumers."

    Several of us have tried to explain to the membership that it is OK to be social after you have addressed the Real Estate business. We have actually met incredible resistance. There are quite a number of members who do not (or can not) write to todays real estate issues. Real Estate articles drive consumer traffic, it is critical.

    What suggestions would you make to deal with this particular issue?
    Reply to this
    1. 9/30/2007 10:20 PM Pat Kitano wrote:
      Hi Laurie, thanks! Right now, the consumer can't go to AR without being inundated with content irrelevant to their needs. Localism doesn't quite work as the envisioned consumer destination, but a redesign might make it more workable. That's why the strategy may not be to attract the consumer to AR, and you've succinctly explained why AR is so consumer- unfriendly.

      Without going into too much detail (mainly because these ideas require in depth discussion and vetting among interested parties), are there partnership models that allow AR to work together with brokerages and other RE companies to develop agent blogging, which happens to be an AR value proposition? If so, can the quid pro quo be access to listings, which in turn drive consumer traffic?

      Yes, it's still nebulous, but AR may be resigned to being the valuable resource B2B (realtor-to-realtor) platform it has become and to re-create Localism to look more like a listings site with a rich foundation of hyperlocal content.

      Reply to this

  • 9/30/2007 10:00 PM Brian Brady wrote:
    Excellent post, Pat. I've tried to point out some of these shortcomings, all weekend to members on Active Rain, but have been hammered for my straightforward approach.

    AR is an excellent forum for a vendor or originator but until the consumer shows up, it's just a big Chamber of Commerce meeting online.

    I have supported this network for 14 months and dedicated a healthy portion of my time towards building a brand there; I'd say I'm a serious stakeholder. My hope is that critical thought prevails and the difficult discussions are held. Too often emotional comments are made when someone tries to point out the logical problems.

    Hopefully, this manifesto you've written will become a guide for the AR-rati.

    Kevin T.- thanks for keeping an open mind; I appreciate your insightful commentary.
    Reply to this
    1. 9/30/2007 10:28 PM Pat Kitano wrote:
      Thanks Brian... your posts address the areas where AR needs to reinforce and we basically say the same things.

      Activerain.com v. Move.com: The Duplicity at Activerain.com - issues re: the co-dependence of Active Rain and it blogger network and how fragile and fickle that relationship can be

      ActiveRain.com v. Move.com: Where’s Caleb? - questions about whether management is up to snuff to initiate a major strategy shift
      ActiveRain.com v. Move.com: The Nagging Question - the real nagging question is how AR will deal with the competition now

      Active Rain Wuz Robbed - another example of how the real estate world works and it's not pretty.

      I'd venture to say if AR-rati arrive at a consensus for change, AR management will be listening.

      Reply to this

  • 10/1/2007 10:43 AM ben wiseley wrote:
    Great post.

    I really agree with content distribution... I've been pushing for a while that we should be able to import other blogs - I think it'd get us better, wider content. What will make or break AR is: can we separate good content from bad and get it to the right channels (consumers [Localism], other agents, etc). That's a bit of a sticky wicket to solve - but, it's been solved other places (Digg). Either way - the content is what will make or break AR - if we can do that right retaining members will be a no-brainer.

    Lawsuits are always a huge distraction.

    I think the team has some really serious challenges during the next few months. Should be fun to try to execute on.

    -ben (programmer on AR)
    Reply to this
    1. 10/1/2007 9:13 PM Pat Kitano wrote:
      Pleased to meet you Ben and all the best in tackling the strategic design issues. Youll likely have a full wind behind your sails now because the impetus is to get things done.

      Reply to this

  • 10/1/2007 3:25 PM Athol Kay wrote:
    >>(and there seem to be an uber-involved AR-rati of only about 200)

    This is the #1 AR problem as I see it. Those 200 are smart enough to simply leave AR at any time and continue to publish on their non-AR blogs.

    Without those 200, AR is just a bog ball of internet lint.
    Reply to this

  • 10/1/2007 4:24 PM Maureen Francis wrote:

    Excellent ideas here. AR should hire you as a consultant to lead them through this. The lack of consumers on AR is part of what pushed me away from my former AR addiction. There are other benefits for those Realtors who seek them: AR helped me grow my outside blog more quickly than anything I had done previously. The SEO benefits were fab.

    I also don't know of a buyer that ActiveRainers will gladly accept, other than possibly google, and Google probably isn't interested.
    Reply to this

  • 10/1/2007 4:28 PM Missy Caulk wrote:
    Well, I came and read and your poll shows the results of how everyone liked your article.
    Once again, Patrick. I am a RE/MAX agent and I love the International brand and all it offers. But, local brokers ? I had to tell them what a blog was in January and they had never even heard for myspace. Most brokers just don't get it. I think Prudential already established a blog platform. The people that blog on AR are head and shoulders above the rest in their offices, nationwide. Good thoughts otherwise.
    Reply to this
    1. 10/1/2007 9:22 PM Pat Kitano wrote:
      Missy, you are completely correct.

      Here in the SF Bay Area, Kevin Boer and I are telling agents and brokers that the real estate community outside Silicon Valley doesn't really understands that blogging is the next generation real estate marketing platform, akin to how a simple agent website was leading edge in 1999. Except that the future is now, the first mover bloggers will create a powerful online presence in terms of SEO and traffic that bloggers starting next year won't be able to catch up with.

      And even with a tech-savvy agent base, still very few act on the opportunity. But the ones that do get it are rewarded - the bloggers anecdotes demonstrate this.

      Reply to this

  • 10/1/2007 6:10 PM Faina wrote:
    Pat, from what I can discern reading the comments,the active contingent on AR are very supportive of AR. They say they make money on this platform: my guess it's mostly from agent-to-agent referrals. Others say, learning from each other is good enough for them.If that's the case, AR could be a viable, but a very different model. Those who come there to attract consumers may not exactly fit into the present mold.
    Reply to this

  • 10/1/2007 7:42 PM Maureen Francis wrote:

    That is why I have wondered (aloud) who are the owners and/or investors in ActiveRain. Maybe some of the top bloggers stick around because they stand to gain financially. It could also be part of the reason they are the top bloggers.
    Reply to this
    1. 10/1/2007 9:27 PM Pat Kitano wrote:
      HI Maureen, thx for the great comments. Unfortunately the way of the world dictates that owners don't voluntarily distribute windfalls to website contributors, say bloggers. It would be a nice touch, but even as I say this, it sound unworkable - who gets what?

      Reply to this
      1. 10/2/2007 9:31 AM Maureen Francis wrote:
        I am not so naive to assume that windfalls would be voluntarily distributed. Startups need capital, which is inherently challenging to come by. Isn't it possible that AR got start-up money from some of its early bloggers?
        Reply to this

      2. 10/3/2007 11:09 PM Brian Brady wrote:
        I don't think any of us are looking to share in the windfall, Pat. I don't begrudge nor would I criticize selling.

        Contributors on Active Rain are stakeholders. There is a quid pro quo agreement that comes with active participation; I build content, you build my web presence.

        Disingenuous comments or material misrepresentations, as were uttered by the executives at Active Rain, cause leading contributors to doubt the veracity of their ability to effectively manage a going concern.

        Until the top dogs in the Rain admit that they misspoke last fall, I will post with a jaundiced finger.
        Reply to this

  • 10/2/2007 11:54 AM Christopher Smith wrote:
    I've got a different take on this one. You state that "...the voices of these bloggers have been underestimated because the consumer has yet to discover their existence."

    The rub is: consumers will NEVER discover their existence. Blogs are useful because they’re search engine food - when someone types in "Central Houston Real Estate" then Joe Realtor's blog might pop up, but the vast majority of Realtors who write blogs are writing content that will never generate a readership among the general public. If we’re waiting for Realtor blogs to catch on with the general public then we’ll be waiting a long time.

    $33 million for fifty thousand members? This lawsuit reeks of hurt feelings and dashed expectations. I like Active Rain, but I’ll eat my hat if they win this case.
    Reply to this

  • 10/2/2007 8:30 PM Andrew wrote:
    Hey Pat,

    Great article and discussion.
    Reply to this

  • 10/5/2007 10:43 AM Gena Riede wrote:
    I certainly hope that AR will gain back the trust and implement some of the ideas that you mentioned, Pat. It was my starting point and I have a lot of loyalty to them.

    Congratulations on being selected one of the Top 25 Most Influential Bloggers!!
    Reply to this
    1. 10/6/2007 7:07 AM Pat Kitano wrote:
      Thanks for your comment Gena! I think AR will do fine in the loyalty department...

      Reply to this

  • 10/8/2007 12:18 AM Marc Blasi wrote:
    The next move has got to bring more Consumers to the site. W/o that it will never be hot enough to attract serious $.
    I think this recent attempt at a sale was too soon and for too little.
    Reply to this
  • 10/14/2007 8:17 PM Renee Burrows wrote:
    Speaking of duplicate content, you've been plagiarized on AR: http://activerain.com/blogsview/237223/What-Active-Rain-should

    There are many problems that need to be cleaned up there, and this is definitely one of them!
    Reply to this
  • 10/14/2007 11:40 PM Laurie Manny wrote:
    I think it has already been sold.
    Reply to this
    1. 10/14/2007 11:50 PM Pat Kitano wrote:
      Wow... I'm surprised... tell us more if you can Laurie...

      Reply to this
    2. 10/15/2007 5:01 AM Renee Burrows wrote:
      I think it is obvious that something has gone on in the last couple of weeks. Brian's blog post about the kersplat was pretty telling.
      Reply to this
  • 10/15/2007 12:04 AM Laurie Manny wrote:
    It just feels like it has been.
    Reply to this
    1. 10/15/2007 6:32 AM Pat Kitano wrote:
      A metaphor... and a juicy one at that... got me to thinking about another article - how AR is gaining a MySpace-like reputation...

      Reply to this
  • 10/20/2007 7:43 AM Bill Gassett wrote:
    I am confused by why you say that the Active Rain site is difficult to navigate and hard to find what you are looking for from a consumers perspective? I have visited so many real estate blogs that are essentially a garbled mess with no proper structure what so ever. What am I missing? The posts through AR are highly indexed by google? Would this not be the way the vast majority of people find what they are looking for to begin with?
    Reply to this
    1. 10/20/2007 9:38 AM Pat Kitano wrote:
      Bill, at first glance, most blogs tend to look garbled because of the article based structure. Consumers have to delve into the blog to understand their utility for their needs. That's why most real estate professionals follow a hyperlocal strategy in order to attract potential clients attracted to such local information and data. And as you seem to know, standard agent websites are ubiquitous and undifferentiated so consumers don't pay attention to those.

      Although Active Rain's articles are indexed by Google, they don't seem to appear that prominently for the high demand keywords like "Sacramento real estate" or "Palo Alto real estate agent". Google test this for your cities you're focused on. I'm not sure how well AR does on Google with the " long tail" words. If consumers do happen onto Active Rain, they can eventually get lost in a blog network of over 50,000 members... that's one reason it's more confusing than landing on an individual agent's blog.

      You'll eventually see bloggers with their own blogs populating the results of Google queries for high demand keywords, and especially the long tail keywords (see examples above). I notice you're on AR with a blog... I've always advocated that agents like you start your own blog under your own domain and use AR to drive traffic to that blog. That way you'll be building your own web property that will grow throughout your career. AR can do that too, but you don't own your AR site.

      Reply to this
      1. 10/20/2007 1:07 PM Bill Gassett wrote:
        Pat - Thanks for your insight. I do think though that your point in regards to the short tail would be the case because of the fact that many of the sites that rank so highly in those positions have been around for quite a while and are typically sites that have massive amounts of inbound links such as homes.com ect. My AR blog can usually get to the 1st or at worst 2nd page for even the short tail. My blog for the long tail almost always is on the 1st page in the top 3 spots. In my area of Massachusetts I have found AR to be extremely powerful in google and yahoo. In regards to just happening to land on AR...How many times would that happen? More often than not, it is a keyword phrase that is typed into a search engine that will bring you to a specific post?

        One of the best things about the mybloglog feature is the keyword tracking they use. You probably know this but you can see exactly how a consumer has found you from their keyword search. Maybe I am in the minority but I have been on AR for 3 months and have gotten 4 new listings as a direct result of having a blog there.

        I understand what you are saying about blog ownership that makes perfect sense. Do you have a blog platform that you recommend? What is the platform for this blog?
        Reply to this
        1. 10/20/2007 7:38 PM Pat Kitano wrote:
          Bill, thanks for sharing your search engine results from Active Rain and kudos for the leads you're generating. Active Rain doesn't come with analytics to find out where your traffic is being sourced. MyBlogLog is good for this, Sitemeter also works.

          If you start your own blog, I recommend Wordpress.org to build a blog under your own domain name. You may create a separate blog that is linked to your website via a tab on the website. I admit the platform Transparent is on is not a good one... making the right blogging decisions beyond just the writing is important. I do have a short tutorial you can find on the left sidebar.

          Reply to this

  • 10/20/2007 7:57 AM Susanna wrote:
    Hi, I am one of those wanted consumers and I was not impressed with Active Rain, infact I was driven away. The website was confusing and seemed messy. I have to admit I am not very patient but I gave it a good 5 minutes and then went back to my search results to click on other resources. Is that what realtors want? A redesign is definitely necessary if consumers are wanted. But THAT probably wasn't on their agenda at the beginning and change is hard.
    Reply to this
    1. 10/20/2007 9:40 AM Pat Kitano wrote:
      Hi Susanna,

      Believe it or not, it's very refreshing to hear a candid evaluation from a consumer! AR needs to do focus groups.

      Reply to this

  • 10/21/2007 4:04 AM Bill Gassett wrote:
    Pat thanks for your advice and compliment. I will check out wordpress. Your site is an enjoyable read.
    Reply to this

  • 5/16/2008 4:50 PM Real Estate Marketing 2.0 wrote:
    This is very a very interesting perspective, do you think that they'll hold onto their market share? or that they'll start to get eroded to larger platforms as realtor.com and others launch their own portals for realtors to start blogging from?
    Reply to this

  • 3/21/2010 7:47 PM Bill Gassett wrote:
    Hi Pat - I was looking at this comment I made here about Active Rain quite a long time ago. I still enjoy the site quite a bit but also have a Wordpress blog as well built on the Thesis theme and I love it especially for SEO. Check it out when you get a chance
    Reply to this

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