Online auctioneer Trade Me has moved into the property market.
It has acquired Flathunt.co.nz – a flat and flatmates wanted website. Managing director Sam Morgan says the deal involved Flathunt founder Rowan Simpson taking an undisclosed equity stake in Trade Me. No cash changed hands and Simpson now works for Trade Me. Trade Me is also looking at expanding to offer similar retail sites, with cars being “an obvious choice”. “We will see what else works - travel, finance, who knows? We are looking to diversify the Trade Me brand and move into things when they present themselves,” says Morgan. Morgan says there isn't room for small websites in New Zealand. “It's a small country. We will only end up with a couple of strong brands in this space,” he says. He says Flathunt receives 1500 users a month while Trade Me has 120,000 monthly users. Morgan is convinced Trade Me will be among the survivors, stressing it is “absolutely making profit”. “We have two parts of our business - advertising revenue and auction commissions; and now listing fees for flats. We are particularly focused on keeping our costs at a reasonable level." Trade Me only employs up to four staff he says. Morgan says last month’s New Zealand launch of eBay has made “no impact” on Trade Me as the US-based online auctioneer “hasn’t really focused on New Zealand” but has linked to its US site via Xtra. The market is also different and it is impractical to ship items like TVs. Flathunt costs $3.50 a month a flat for property managers and agents, but is free to flathunters, with a free flat alert service for prospective tenants. A mobile phone service is planned.