Kevin Lisota: A few months ago, I wrote about a game plan for Google in online real estate, suggesting how and why they may actively enter the real estate market and use acquisitions to get there. On July 1st, Google announced that it was acquiring ITA Software, an airfare search and pricing provider, signaling an entry into the airfare search vertical.

For the major search engines, there are many analogies between airfare search and real estate listings, and the move to go deep on airfare search seems a clear indication that they are likely to do the same with real estate.

Consumers searching for airfare often enter queries directly into Google or Bing for things like “flights from Seattle to San Francisco.” Google returns a set of the standard blue links, which all immediately take the user out of the search engine and into a travel provider’s website.

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Bing is clearly superior on flight searches, keeping you in the search engine and returning fares from a variety of providers. Their Farecast acquisition allowed them to provide a much richer search result and also offered them a more direct way to monetize the ticket purchase, not just travel provider advertising.

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By purchasing ITA Software, Google is able to offer flight pricing and comparison directly in the search engine experience, improving the customer experience, and likely making more money per visit by getting closer to the actual transaction. Venture capitalist Bill Gurley makes an interesting argument that this new vertical approach may actually put the squeeze on Google’s traditional and wildly-profitable CPC business.

THE REAL ESTATE LISTINGS PROBLEM

Real estate listings in Google face a very similar problem to airfares. The search engine provides lots of results, but zero context and information within the search engine itself, so you have to leave Google to get the content.

For those not in the real estate business, you would be surprised at just how many long-tail searches are performed by consumers searching for a particular address or Multiple Listing Service number. We are only in one market, but we see lots of these searches every single day.

The most popular real estate sites are the ones who present each and every listing to the search engines in the form of a nicely-indexable URL. Sites like Realtor.com and Redfin have filled Google’s index with four million URLs of homes for sale, Trulia has seven million URLs and Zillow takes it a step further and indexes all of the properties in their database, regardless of if they are for sale or not, and has 12 million URLs currently in Google.

Loading the index with individual property listing is super successful. Google loves it because they are provided with a wealth of easily-indexed content that people are clearly searching for. The big real estate sites also love it because it drives lots of longer-tail search traffic to their sites. Not only do the big sites hit all of searches for property address or MLS number, but they also bubble up when people search for things like “homes for sale in XXXXX ZIP Code.”

If you look at the list of most popular real estate sites, it is clear that having an elegant map search or loads of property data is not what wins this popularity contest. Some of the top 20 sites are downright crude, but they have mastered the art of driving search engine traffic.

When the consumer enters a search for an address or MLS number that they know is for sale, they are presented with this mess:

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I count at least 15 identical results with various sites surfacing the exact same listing information in Google. How does a consumer choose which link to click on? Who knows, but from our own personal experience, many do this every single day. This is hardly a great user experience within Google, and as more companies index their MLS listings, the identical search results pages will keep growing and growing.

Let’s say for a moment that Google does decide to delve more actively into the real estate listing business. What if these same search results looked like this mockup, with the first link surfacing listing data directly within Google?

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Would this improve the Google user experience? Most certainly. Which link would you click on now? Or asked another way, why would you ever click on the 15 other text links for the same property?

Regional MLS systems are unlikely to feed Google listings any time soon, but would real estate agents? Of course they would, as most already feed listings to a multitude of sites.

Would real estate agents pay for more prominent placement and advertising opportunities centered around Google listings? You bet. Zillow, Trulia and Realtor.com business models are already predicated on this.

Now take the same concept and aggregate multiple results when people search for “homes for sale in city X” or “real estate in ZIP code XXXXX.” You don’t even need a map search to surface loads of traffic in the search engines, though a map search is a logical add-on to the experience.

GOOGLE'S ENTRY WILL KNEECAP EXISTING SITES

Google has an enormous volume of real estate-related searches on any given day, and the most popular real estate sites are enjoying the big traffic that comes their way as a result. Even for a brokerage like our own that is only in one market, the traffic to listings on our site from Google is substantial.

Redfin CEO Glenn Kelman stated in July 2009 that a full 40 percent of their web traffic came from organic, unpaid Google searches. Some of that is certainly from non-listing content, but I’d bet that a large chunk comes from their millions of listing URLs.

If Google were to surface more robust listings directly in their search results, a huge volume of searches will never make it to these other sites, and Google has an opportunity to monetize the experience by charging real estate agents for additional exposure or lead capture capabilities.

Kelman had some interesting commentary in GigaOM this week when asked about this scenario. When asked about the possibility of Google acquiring a vertical search engine like Truila or Zillow, he raises concerns about data quality and data availability from regional MLS databases, and points to brokerage websites as more reliable data providers. His point is valid, as Trulia and Zillow are not MLS members and do not have complete coverage, so their listing data can be incomplete or stale compared to real estate brokerage websites.

However, all of the big real estate sites have a vested interest to keep traffic flowing freely from Google to their sites. By surfacing listing data and photos directly in the search engine, it could take a very big slice of traffic away from these sites, possibly pointing it directly to listing agents.

IS MY LISTING ON GOOGLE?

Today home sellers ask the question, “Will my listing be on the MLS?"

Sometimes they also ask if will be on other sites like Zillow, Craigslist, etc. They never ask if their listing will be on Google, because Google doesn’t have a popular real estate site. However, with a couple of quick steps and probably an acquisition, consumers will definitely start asking that question.

Once they start asking the question, the concerns of data quality and coverage diminish, as it becomes required for real estate agents to advertise and update listings directly with the search engines, in addition to MLS sites.

Effectively entering the real estate listing business requires skill sets that Google currently doesn’t have.

First, their is a need for an infrastructure to collect syndicated listing data from thousands of agents and brokerages. More robust property data and statistics are important as well, and it would be super helpful to have a sales force in place that is already interacting with the real estate community to sell add-on advertising opportunities.

Given those challenges, an acquisition seems a logical course of action, and I’d bet on Trulia at the moment, since Yahoo seems to already have chosen Zillow for a similar task.

It will be interesting to see how Google ends up addressing real estate, but I’d bet that we will seem something similar to what they have done for airfares in the very near future.

Kevin Lisota is founder and president of Findwell, a Seattle-based online real estate startup. Opinions expressed in guest posts are those of the author and don't necessarily reflect the views of TechFlash.