HomeAway goes public in a few days. This well-funded company (they’ve raised about half a billion dollars) has gotten some attention. What’s gotten less attention is that they’re an increasingly mature player in the industry. Although they sport a high revenue growth rate and good margins, many aspects of their business model simply aren’t sustainable.

Their Web Properties

United States

  • Homeaway.com
  • Vrbo.com
  • Vacationrentals.com
  • BedandBreakfast.com
  • Cyberrentals.com
  • Greatrentals.com
  • HomeAwayRealEstate.com

United Kingdom

  • Homeaway.co.uk
  • Ownersdirect.co.uk
  • Holiday-rentals.co.uk

Spain

  • Homeaway.es

Netherlands

  • Homeaway.nl

Canada

  • Homeaway.ca

Germany

  • Fewo-direkt.de

Norway

  • Homeaway.no

Denmark

  • Homeaway.dk

Mexico

  • Homeaway.com.mx

France

  • Abritel.fr
  • Homelidays.com

Portugal

  • Homeaway.pt

Italy

  • Homeaway.it

Australia

  • Homeaway.com.au

Sweden

  • Homeaway.se

Finland

  • Homeaway.fi

Brazil

  • Aluguetemporada.com.br

Rankings

A huge strength of HomeAway is that their network of sites rank for the same keywords, therefore taking up a greater share of clicks on the Search Engine Results Pages (SERPs). The keyword “vacation house rentals”, for example, which got 368,000 searches last month, sees HomeAway.com in the #1 position, VRBO.com #2, VacationRentals.com #3, CyberRentals.com #6, and GreatRentals.com just off the first page at #11. The odds of a HomeAway-owned site being clicked on for this particular search query is 69%.

We’ve determined HomeAway’s most valuable keywords to be the following:

  • vacation rentals
  • vacation homes
  • vacation home
  • vacation house
  • vacation house rentals
  • vrbo
  • vacation home rentals
  • vacation rentals by owner
  • panama city beach condos
  • destin rentals
  • panama city beach rentals
  • orlando rentals
  • myrtle beach rentals
  • tahoe rentals
  • panama city beach condo
  • costa rica rentals
  • orlando vacation rental
  • virginia beach rentals
  • condos in panama city beach
  • home away
  • vacation rentals outer banks
  • ocean city maryland rentals

Links

Internal Links

HomeAway’s internal linking structure is strong. Take a look at the valuable keyword “Tahoe rentals”, for example. The page that ranks on HomeAway, www.homeaway.com/vacation-rentals/california/lake-tahoe-area/r576, has several hundred internal links to it from both high-authority and relevant pages.

Home Page

HomeAway's homepage SEO

Sidebar of every county in California

Sidebar showcasing HomeAway's related links

HomeAway.com also increases the cross-linking within its site by the following:

Breadcrumb Links

Both at the top and bottom of pages

HomeAway's breadcrumb links.

Related Vacation Rentals

At the bottom of property detail pages, there is a dropdown area
called “Other Vacation Properties in [City Name]” with 5 links
to other properties. The anchor text is smartly autogenerated
as “[City Name] [house/home/apartment/cottage/condo] vacation
rental”

HomeAway's auto-generated 'related' properties list.

404 Page
A well-optimized, navigationally-helpful 404 page, with strategic links to top landing pages.
HomeAway's well-optimized 404 page, with strategic links to top landing pages.

HomeAway’s External Links

The majority of website owners link to other sites using the domain name as anchor text. This phenomenon, coupled with the fact that Google attaches importance to “exact match domains” (your domain has keywords that match the search query), is a boon to HomeAway’s sites VRBO.com and VacationRentals.com, whose top keywords are right in their domains. “VRBO” and “vacation rentals” have 1M and 2.7M global searches respectively on Google each month. Both rank #1 for those terms.

Besides generic vacation rental keywords, all of the sites attempt to rank for keywords containing popular vacation locations combined with the word “rentals”, “vacation homes”, etc. While HomeAway has many great links by newspapers and TV station websites covering the company using the HomeAway name as anchor text, it is more difficult to get sites to link using geospecific anchor text like “Tahoe rentals” or “Panama City Beach Condos”.

HomeAway uses a variety of tactics to get links to their internal pages using valuable geospecific anchor text.

Directories

  • Non-discriminatory; anchor text is chosen by HomeAway.

Article Marketing

  • Submit posts to article directories or on blogs as guest
    posts.
  • HomeAway has a team of copywriters who write and post
    thousands of articles across the web with links back to
    HomeAway using geospecific anchor text 

    • http://ezinearticles.com/?expert=Caitlin_Moore
    • http://ezinearticles.com/?expert=Kristin_Dorsett
    • http://ezinearticles.com/?expert=Leah_Carroll
    • http://ezinearticles.com/?expert=Jennifer_Weiss
    • http://www.smarttravelreport.com/authors/3/Caitlin-Moore
    • http://ezinemark.com/a/homeawaycom/
    • http://www.articlestree.com/author/Caitlin%20Moore.html
    • http://www.articlesbase.com/authors/jen-w/8565

Other HomeAway-Owned Sites

  • Since they own so many domains, it makes sense they’d
    cross-link between them 

    • http://www.cyberrentals.com/lake-tahoe-area/s/576/fa/find.squery and http://www.greatrentals.com/lake-tahoe-area/s/576/fa/find.squery both have links to http://www.homeaway.com/vacation-rentals/california/lake-tahoe-area/r576
    • http://www.perfectescapes.com/Luxury_Hotels-MAID49-DID107-Hotels_In_Northern_California-San_Francisco_California.html links to http://www.homeaway.com/vacation-rentals/california/san-francisco/r2231 (and interestingly enough, vice versa. HomeAway has a link with the anchor text “San Francisco hotel deals” on its page.)

301 Redirects

After acquiring sites, HomeAway often redirects the site to HomeAway using what’s called a “301 Redirect” which also passes the metrics Google calculated about the pages of the site to the new site. See http://www.a1vacations.com/Lake_Tahoe.htm redirect to http://www.homeaway.com/vacation-rentals/california/lake-tahoe-area/r576, for example.

Buying links, selling links, employing link farms, link exchange programs, and manipulatively placing links on pages without the consent of the site owner are all against the search engines’ terms of service and may result in penalty. Google dedicates a whole page in its Webmaster Tools Help on Paid Links.

HomeAway has engaged in paid links. An analysis of their Lake Tahoe page reveals external links from Guidebook America (links sold here), My Pet Friendly Cabin (links sold here), and Scottsdale.com (links sold here), among many other sites that appear to sell links but do not advertise the fact up front.

We were able to get a hold of one of the webmasters with suspicious HomeAway links, homosassaflorida.com, and indeed they confirmed, “Local links are $100 per year. Call me if you’re interested.”

Some websites linking to HomeAway appear to be hacked. For example, the Ventura County Agricultural Water Quality Coalition website has a link with the anchor text “U.S. Rep. Elton Gallegly, Water Resources Authorization Act of 2010″ pointing to homeawayrealestate.com.

HomeAway has been able to hide under Google’s radar but their search strategy is not sustainable. We believe they were able to escape the detection of the algorithm for this long because their paid links are rather stealthy — on pages somewhat relevant to vacations and that look natural enough being in the content body rather than template-based areas like footers and sidebars. Here’s an example: alaskatrophyfishing.com links to HomeAway. This is on a site relevant enough to vacation rentals and the link (“Cabin Rentals”) is naturally in the main content area. As Google’s algorithm improves though, expect to see such links algorithmically discounted, if GOOG doesn’t decide to apply a manual penalty sooner than that.

The two key takeaways here are that 1) multiple HomeAway-owned websites rank for the same competitive keywords thus increasing the odds that people land on their network of sites and 2) HomeAway continues to use paid links, which means if any penalty were to occur, HomeAway’s fall from the search results page would be worse than just one site being demoted.

Macro Situation

The housing market is in flux. That does present opportunities, and HomeAway has taken advantage of them. It’s hard to understate the importance of the macro environment in HomeAway’s growth. They’re a well-executed marketplace, but they showed up at the perfect time: after home prices peaked and homeowners lost the ability to cash out. A huge number of homeowners (disproportionately located in a few high-tourism states like Nevada, California, and Florida) needed cash flow, and all of them had much of their net worth tied up in real estate.

HomeAway’s model creates a market where there are eager buyers and desperate sellers. They’re naturally earning some major dividends from this. But there’s ample reason to argue that HomeAway’s early lead won’t necessarily translate into long-term dominance:

  1. Their model has little pricing flexibility. Once the spread between buyers and sellers decreases, HomeAway may have to alter its model.
  2. HomeAway will need to change models regardless as the housing overhang unwinds.
  3. HomeAway is facing serious competition (in terms of pricing, PR, and SEO) from AirBNB.

We worked with Robert Peck on this Business Insider post, which puts this research in more context.

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Is HomeAway’s Competitive Position Stable?