“Alexa, How Much is My House Worth?”

Competing Business Models:  Referrals vs. Advertising

[Editor’s Note:  The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway (“Berkshire”), or any other entity referenced. Edina Realty is a subsidiary of Berkshire.]

With artificial intelligence gaining momentum, it was only a matter of time before Alexa, Siri, or another digital personal assistant was asked — and answered — the question, “How much is my house worth?

At least in the YouTube video I saw, once the user provides an address, Alexa actually gives a specific dollar amount (with the inevitable qualifier, “approximately”).

Better Than a “Zestimate?”

How close did Alexa come?

Since I don’t know anything about either the home in question or location (Aurora, Colorado), I have no way of knowing whether the amount is remotely accurate.

But then, neither does Alexa.

Instead, it quickly became clear what Amazon’s business model is (at least for now), when Alexa immediately asks the user “whether they’d like to be contacted by a real estate agent.”

Still not clear?

Amazon is positioning itself to collect referral fees . . .

P.S.: By contrast, the business model for Zillow, Trulia, etc. is all about aggregating online eyeballs that they can turn around and sell to advertisers.

See also, “Why Realtors Hate Zillow“; and “Zillow CEO Sells Home For 40% Less Than “Zestimate.””



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