Stagnant Domestic Market and AdSense Changes See Lifull's Q3 Revenues Dwindle at Home and Abroad

The real estate portal company Lifull announced its results for Q3 of the Japanese financial year. The group which operates the Homes.co.jp portal as well as international aggregators Mitula, Trovit and Nestoria (collectively known as Lifull Connect) saw both revenue and profits fall in the nine-month period from October 2021 to June 2022. The headline figures from Lifull's announcement for the nine months included:

• Revenue declined 1% year-on-year to ¥26.6 billion ($196 million)
• Operating profit was down 74.5% year-on-year to ¥0.63 billion ($4.6 million)

Domestically, Lifull's Home's segment saw its client network increase slightly year-on-year to 28,829 (+1.74%) and the portal invested substantially in marketing during the peak Japanese moving season. Still, the business also saw a -5% drop in average revenue per agent (ARPA) as overall portal revenue decreased.

The removal of partner sites, a decrease in Japanese agents' advertising budgets and lower demand for new-build houses were cited by the company for the poor performance of its domestic portal operations.

Another possible reason for the poor performance of Homes.co.jp might be the increased market share being taken by rival portal O-uccino.jp which, according to traffic data from Similarweb, has grown significantly over the last year or so.

On a positive note for Lifull's domestic portal, Homes.co.jp is to enter into a transactions-based partnership with rival Rakuten Real Estate. The deal will see the two sites share property data and jointly monetise leads on a commission share basis with agents. Users will earn loyalty 'Rakuten points' and earn discounts on moving costs.

Overseas segment struggling as AdSense changes bite

Lifull's 'Overseas' section houses its classifieds listings aggregators as well as portals such as iCasas and Properati in Latin America and Dot Property in Southeast Asia. The segment usually accounts for around 20% of the company's overall revenue. Of the Overseas' segment's revenue, around 50% was made up of money generated from Google AdSense impressions and click-throughs on the various portals.

Since Q4 of last year, these revenues have been severely impacted by several external factors. Although the money that Lifull Connect makes from charging portals for traffic had been increasing, the decrease in AdSense revenue has had a big impact on the segment's performance.

Lifull hopes to streamline its aggregators' performance over the coming quarters having sold off its fashion aggregator business Fashiola during Q3 to focus on real estate.