27 July 2009 | Author: L. Sutherland News Editor

Australian newspapers hit back at Google's Real Estate service

A recent enhancement to Google's mapping service has landed the search engine in hot water with Australian newspapers.

Last month, the Mountain View giant announced that Google Maps would list hot property with a real estate feature providing aggregated listings of estate agents and publishers. The initiative was rolled out for testing in Australia, but now two of the country's biggest newspaper groups are threatening to boycott Google as a result.

Australian newspapers hit back at Google's Real Estate service

News Ltd (the Australian arm of News Corp) and the Fairfax group, who are the owners of Australia's largest real estate sites Realestate.com.au and Domain respectively, are currently considering their options in light of Google's real estate offering. According to The Sydney Morning Herald, both of the media groups are weighing up the millions of dollars that they spend on Google advertising between them.

Domain and Realestate.com.au currently dominate Australia's online property sourcing market, but Google's foray into the sphere could threaten their position and start the battle for a market that grew 38 per cent last year. The chief executive of the REA Group - which operates Realestate.co.au - Greg Ellis said: "It will be interesting to see how Google reconciles its ability to encourage companies to purchase Adwords, buy Google Maps and DoubleClick services and then compete with those companies who currently or intend to buy these services.

"It's a discussion that should occur across the Australian internet landscape, not just within REA. We are reviewing our options. No decision has yet been made."

Google's attempts to expand its reach into markets further removed from its traditional search sphere have been met with mixed reactions across the globe. When it comes to this latest initiative, Simon Barker, a former chief executive of REA, believes that the search king is threatening to undermine its own, hugely successful; business model.

In an interview with The Sydney Morning Herald he said: "Google is moving from being a search engine to a portal," he said. "Instead of sending you to other websites - which have paid money to be there on its listings - it is now serving up the end data itself. That then raises the question: why would you need to go to the other sites and why would they then pay Google money [for search key words].

"Google has opened up a Pandora's box of questions."