Real Estate Analogies for the Internet

You can draw a lot of analogies between the internet and real estate. Especially from the business side of things.

Assertion 1: The value of real estate property is that people want to spend their time there.
The value of nearly all real estate property can be simplified into this. People pay the big bucks for property, whether it is for residential or commercial purposes because they want to spend their time there.

This is very similar to much of the internet. People pay the big bucks for companies like Yahoo, Facebook, and YouTube because that is where people spend their time. The model is a bit different, in that the more time people spend there, the more you can advertise to them, but the rule is the same. The more people want to spend on your internet space, the higher the value. This is true for smaller operations like blogs too!

Assertion 2: Curb Appeal is important
The old adage goes, "don't read a book by it's cover," but that adage exists, like other adages, because it is a rule that we constantly break. We always judge a book by it's cover, and that is why curb appeal is so important in real estate. First impressions count.

The same is true for websites and online services. Your first impression counts. Beware of putting out a website that looks ugly or that doesn't make a good first impression. For every 20 people that visit your site, only a few might become long term residents. If you make a better first impression, you can increase that number. So make your website have a good first impression.

Assertion 3: You can increase your value by subdividing your property
The real estate market is stagnating now, but just a few years ago in the seller's market, one of the best ways to increase the value of your property was to subdivide your property into parcels.

That is precisely what online services like facebook, friendster, myspace, blogger, wordpress do best. They create a service that people each use a little piece of, little condominiums of content. All those people visiting the many little sites aggregates into huge numbers of visitors and advertising big bucks. What a great idea. Sub-divide, let other people do all the hard work of contributing content, than reap all the profits.

There are plenty of differences between internet property and real estate property, but as we spend more and more time online, locations on the internet look and behave more and more like off-line locations. Drawing analogies between the two can be helpful in understanding how online businesses succeed and fail.