Bronte Media

SiliconBeat via VentureWire has news that Reply.com has raised a $17m round of venture capital.

Reply is a  focused version of ServiceMagic, concentrating on the Internet friendly categories of Auto, Mortgages and Insurance, and of course, Real Estate. The company is run by a Noveau-classifieds-set, led by Payam Zamani. He founded Autoweb.com before Reply.

They are extremely efficient acquirers of traffic that they then package for their customers. Venturewire estimates their revenue at $20m annually. I spoke with them last year and they had some very smart thoughts on the transition of the classifieds industry into a performance-based world.

The problem that I see is that they have little to differentiate themselves from the other ‘form-filler’ firms like Housevalues in real estate and Lendingtree in mortgages. There is only so much direct marketing optimizing you can do to lift your conversion rates on the said forms.

Actually, they are as close to online arbitrage as you will get to that poor analogy. Much more so than vertical search.

Then there are the fact there are forms at all. The ‘dark-curtain’ consumer experience involves the user filling in a detailed form and then being hassled by multiple people over the phone in a short amount of time after doing so. In housevalues’ case, the home owner who is looking to value his or her house is pressured into selling it by the realtors who are the ‘valuers’ that respond. In kind instances, only one person contacts the consumer who fills out a form.

That is one of the fundamental problems I am trying to solve with Homethinking.com. But that said, I have a very high opinion of Reply.com and think that they will make a lot of money in the years to come.