Monthly Archives: December 2008

Merry Christmas, Realestistas!

Christmas Eve being tomorrow, and with me being out over the Holidays next several days originally intended to celebrate the birth of Jesus Christ, the Savior of the world in the Christian faith upon which Western Civilization has been built, blogging will be light to nonexistent.

And yes, I know that the word realestistas doesn’t really exist. Yet. But RE.net has such a specific connotation now that is far more connected to blogging than it perhaps ought to be. Twitterati is obviously connected to Twitter. We need a term that refers to all of us in the industry, who care about the industry, who see the importance of technology in real estate, and are active in the industry in one way or another.

So I give you realestistas (REE-uhl es-TEES-tas). Consider it my gift to all of you. And like most Christmas gifts, it may be returned for a full refund, or regifted, or hidden in a dark attic to be found decades from now by your grandchildren who will marvel at us poor backwards people and put it up for auction on Goobaymazon.com for like 250 Universal Credits.

There have been a lot of great discussions and grand debates on this blog recently, and while I want to continue the conversation, right now, all I wish is peace on earth, and goodwill towards men and women.

May the Lord smile upon you and yours during this blessed season.

-rsh

Free Advice to Brokers: Three Things To Do in 2009

I’ve been engaged in much discussion of late on the future of real estate, and we’re having a debate right now between those who believe that the future is made up of numerous independent agents (or small agent teams) operating in low-cost, low-service brokerage models and those who believe that the future actually belongs to Big Brokers who come to their senses and start investing in their future.

Let’s call the former camp Kristians, and the latter camp the Robnecks. Fact is that the Kristians are much nicer, better looking, and have invaluable perspective as on-the-ground practitioners of the craft. On the other hand, the Robnecks have the laws of economics on their side….

But this post isn’t about either one of those Grand Debates. This post is… well, I don’t know what it is. Whimsy, probably — which also happens to accurately describe 95% of the posts on this blog.

Basically, I wanted to offer a bunch of free, unsolicited advice to brokers of all sizes, varieties, and business models. Being that this is free and unsolicited, the approximate value of this advice asymptotically approaches zero on a relatively steep curve. But hey, when has ‘value-free advice’ ever stopped me before?

So… rather than grand theory, here are the top three things I would do if I were running a real estate brokerage in 2009:

  1. Get a Clear View of My Business
  2. Invest in Technology
  3. Hire a Real Marketer

Let’s get into it, shall we? Continue reading

The Challenge: From 3% to 10%

In the comments of this post, I wrote that THE challenge facing real estate is how brokers move from 3% profit margins to 10% profit margins.  And I just got off a fantastic teleconference featuring the likes of Kris Berg, Marty Frame, Pam O’Connor, and other experts talking about the industry.

Then Kris, Jay Thompson, and I got into a Twitter discussion about broker profitability and the path to it.  The 140-char limit is not conducive to real discussion, so… this post.

Let’s set the stage.

I have heard from various sources who ought to know (e.g., COO of a very large brokerage in the South, president of major franchisor, etc.) that the average profit margin for real estate brokerage is about 3%.  This means that some are over 3%, but a huge portion are actually below 3%.  (Remember, average, not median.)

The average profit margin for corporate America over the last 25 years is 8.3%.

As of today, 30-year Treasuries are paying a 4.5% coupon, and yielding 2.66%.

So by taking ZERO risks with my money and investing it into 30-year Treasuries, I will make 2.66%; by taking all sorts of risks (litigation risk, business risk, etc.) and for taking on the headache of managing a whole bunch of real estate agents, I’m going to make 3%.

There is so little incentive to become a broker if this is the situation.

More facts: The average company dollar for real estate brokerage (based on the REAL Trends Brokerage Performance Report) is 26.8% — meaning that for every dollar of GCI revenue, the broker receives 26 cents.  Then out of that company dollar, the broker has to pay for all the overhead, the office space, the advertising, the websites, so on and so forth.

The Debate

So the question is, how does a broker improve his profitability?  Because if profitability is so low, then he might as well just put his money into Treasuries and earn more.

Kris Berg suggests that the answer is for the broker to stop giving agents all these ridiculous, unused, useless tools and gadgets, and to just get out of the way.  Jay Thompson echoes her thoughts and points out that he’d make more money from a really good agent at 10% split than a crappy newbie at 40% splits.

Okay.  So, the issues are:

1.  Profit ($$) vs. Profitability (%)

Profit is raw dollars; Jay probably does make more $$ from a top agent at 90/10 splits.  However, his company dollar is 10; his maximum profitability from that agent is 10%.  After taking all of the costs of having that agent into account, I suppose Jay could calculate the profit margin of that particular agent.  If it’s 2%, then I have to recommend to Jay that he fire the agent, take those dollars he would have invested in keeping that agent (e.g., overhead, utilities, whatever) and put it into Treasuries paying 2.66%.  He’d actually end up making more money.

2.  Scalability

This is something no one truly knows.  No doubt Jay’s actual profit margins are higher — he’s estimating maybe even 9% or so.  That puts his profitability in line with corporate America, trend-wise, and makes it worthwhile to keep being a broker.

But does this translate to say Crye-Leike?  No one actually knows.

And the impact of margins get outsized as the actual dollar volume increases.  Going from 9% to 7% for a small operation might mean profit decreases from $90K a year to $70K a year.  But if you’re a Big Brokerage, then going from 9% to 7% could mean going from $90M a year to $70M — those $20M dollars could have gone into things like investment in more innovation, a better website, whatever.

Conversely, if you take two large brokerages, and one makes 9% and the other 8.5%, that could still mean a $5M a year advantage for the one making 9% to reinvest into the business.  After a few short years, those millions will start to have an impact on the weaker business — whether that’s through more effective branding, better training, or better consumer website that the extra $5M a year can buy.

3.  Incentives

The key question, I think, is that of incentives.

If a broker is seeking to be a low-cost, low-value provider to the agent, what exactly is the agent’s incentive to pay the broker a larger share of GCI?

And if the answer is None, then the claim absolutely must be that for a broker to increase profitability, it must be done by cutting costs other than labor costs.  In fact, the money saved from eliminating all those ancillary tools and overhead must more than make up for the inevitable decline in company dollar.

Consider.  If today, you’re giving me $10,000 worth of tools and services, and I’m paying you 20% splits… it is entirely irrational for me to agree to keep paying you 20% splits if you drop what you’re giving me to $1,000.  So that $9K you’re saving by dropping your services to me to $1,000 had better be more than the company dollar you’re going to lose when I demand higher splits (let’s say to 95/5).  So 15% of my GCI production for that year has to be less than $9k you’re saving for this to end up improving your profitability.

Is there a scenario where this could work?  Possibly.

I just can’t imagine it.  The incentives are completely out of whack.

The Answer?

Seems to me that at the end of the day, it comes back to an issue of Productivity.  Somehow, I as the broker, have to get more productivity out of my agents without raising my labor costs significantly.

Well, since Productivity is classically defined as “Output per unit of labor” the only two ways to increase productivity is to raise output (i.e, GCI in our case) or lower per unit labor costs (i.e., agent commissions).

Raising output then means somehow, the agents you already have, without any additional assistance, tools, or services, simply have to make more deals happen.  It’s possible, of course, if the market conditions improve, or they just get better at selling homes.  But that strikes me as an exercise in “hope and faith as corporate strategy”.  Just Do It! is rarely an effective business strategy.

Lowering per unit labor costs is similarly fraught with difficulty.  If someone is making 80% of GCI on a split, what exactly is his incentive to make less, if you are giving him nothing more?

So… I come back to this: Technology.

The only proven way to improve output per unit of labor is to invest in technology.  A farmer using a horse-drawn plow can produce more grain if he’s given an International Harvester.  A shoemaker producing two shoes a day using a hammer and scissors can produce two hundred if he’s given an automated modern factory with an assembly line and modern inventory management.

It’s the only known answer we have.

So if a broker wants to improve profitability, seems to me that he has no choice but to invest in technology to make his agents more productive, while either demanding more money (since he’s giving them more) or keeping labor costs constant (since he’s giving them more).

Am I missing something here?

-rsh

Realtors vs. Lawyers: Social Media

While I managed to escape the fate of practicing law (except for a summer experience, which is to actual legal practice as Barbados is to Mogadishu), I still have a great deal of affection for, and interest in, the business of law practice. In fact, I wrote an entire series musing on whether real estate firms should become more like law firms.

And one of the blogs I find most interesting is Real Lawyers Have Blogs (which is shortly getting added to my blogroll). The author, Kevin O’Keefe, is a recovering attorney who writes on social media, interactive marketing, technology, and overall observations on lawyers and law firms. His blog is really worth a read.

His most recent post was on lawyers and social media, and given how much we’ve been talking about social media in RE.net, I found his observations fascinating.

For starters, Kevin believes that for lawyers, social media boils down to three tools: Blog, LinkedIn, and Twitter.

Now, the blog thing, I get — completely. Especially for a lawyer. Realtors deal in houses and human beings; lawyers deal in words. If you can’t blog as a lawyer, you probably should be thinking about finding a different profession, simply because churning out 1,500 words or so for an informal blog post should be just about the easiest thing in the world. (ED: Yeah, look at your inability to use fewer than forty-eight words to say, Hello. ME: Shut it!)

As Kevin so wisely points out, the blog is the cornerstone of any social media effort:

Blogs? Got to have one. How else can you develop a central place where clients, prospective clients, and the influencers (bloggers, media, and social media hounds) pick up on your passion, philosophy, reasoning, and skill? How do you get seen when people search for info? You think I’m picking a pig in the poke by reading a lawyer profile on a website or Martindale? That’s nuts.

I think that entire paragraph applies directly to realtors as well.

At the same time, I know that I’ve been known to urge realtors to stop blogging altogether. But as I explained in that original post, my point is that a bad blog is worse, far worse, than having no blog. Yes, every realtor should have a blog, but it should be a good one. And if a realtor isn’t a good writer, then he should do video blogging or podcasting or some other way of showcasing his passion, philosophy, reasoning, and skill.

A lawyer, who trades in words, has no such excuse. If you can’t write, and you’re an attorney, you need to get out of the business.

LinkedIn makes sense for an attorney as well. As Kevin observes:

LinkedIn? LinkedIn has won the professional social networking/directory space. The race is over. I get invites from professionals inviting me to join their network elsewhere. Other than LinkedIn and Facebook I ignore them.

For attorneys who tend to focus far more on businesses and professionals, I can see how LinkedIn is the ideal network.

In contrast, I’m thinking that for realtors, who want to connect with consumers, Facebook is probably the superior platform. There are other platforms out there, of course, such as Trulia Voices and now Zillow Advice but neither have (as yet) the reach of Facebook. And frankly, neither is likely to ever achieve the reach of Facebook.

The big one is Twitter. This is a tool that some folks in the RE.net have more or less given up on, while others are extremely skeptical of its value. In contrast, Kevin could not be a bigger fan:

Twitter? Single biggest learning, brand building, network expanding, and reputation enhancing tool for me this year. Twitter’s influence is what took me off this blog so much in the last couple months. Twitter is no longer an experiment for me. Like Guy Kawasaki and Robert Scoble, I’d rather go without my cell phone for a week than Twitter.

Some people will tell you Twitter is a waste of time. Ignore them. Twitter, like everything I’ve discovered on the Internet in this crazy last 13 years, was confusing as all get out when I first tried it. You get less confused by playing with something. Playing for a lot of people is called a waste of time. But you don’t grow by not goofing around. Ask Google.

If you haven’t watched the brief Scoble video interviewing Kawasaki, do so. Guy talks about other things, but Twitter is what amazes him. ‘I think Twitter is, arguably, the most powerful branding mechanism since television.’ Guy says that Alltop would be nothing without Twitter. [Emphasis added.]

Those are… some extraordinary words. The most powerful branding mechanism since TV? Okay, those are Guy Kawasaki’s words, but still. The single biggest learning, brand building, network expanding, reputation enhancing tool?

Wow.

And Kevin’s commenters — lawyers all of them — also express skepticism.  A commenter named Max Kennerly (a litigator, it appears) writes:

I just don’t know about Twitter. I’m sure it works wonders for Guy and Scoble — the primary business for both of them is to exert influence over the most wired 0.1% of the country, all of whom are on twitter. The perception that they are always on top, always on the bleeding edge, is very important to their business.

Not so important to my business nor, I believe, to most lawyers. They need (1) a good reputation among clients and lawyers and (2) to be noticed by potential clients.

I don’t see how Twitter provides any paradigm-shifting benefits to either. It helps you connect in a near-real-time, highly personable manner to maybe a couple dozen people. For most people, it’s microblogging, which is like blogging except without the benefit of showing any sort of expertise or ability, just endlessly links and pithy comments.

What’s interesting about this exchange for me is how different this observation is from the observation that Marc Davison and the commenters made about Twitter in real estate.  Here’s Davison:

But that great promise has yet to pan out. Instead of using this tool as a means to leverage valuable insights, real estate has turned Twitter into restroom wall where anyone with their fly down and a Magic Marker in hand can leave behind whatever childish brain fart comes to mind.

And here are some of the comments:

However, I’m going to respectfully disagree about Twitter. If you want to post market data, and give tips etc, that’s appropriate in a blog or other similar forum, even facebook etc.

Twitter is a medium that people don’t want to see fact, market update, real estate info, etc. It’s a medium to connect with people on a more personal level. Lots of people can post market data on their website, but what person shares similar life experiences?

Twitter has helped make friends within the industry as well as find people from my area that now subscribe to my market info. They didn’t find me on Twitter from my market data posts, they found me because they searched for words like Mac, iPhone, St. Louis, Football info, etc. (I will agree there is a lot of drivel on Twitter)

- Eric Stegemann

As the owner of one of the mentioned “taboos” (maybe 2 or 3?) I stand by all of my tweets. Twitter is a social gathering place and I have met wonderful local people that have become friends who at some point in life will need real estate service. I’ve been told by several that when that need arises I’ll be called on. Some of them I’ve met initially due to similar musical styles (thank you blip), some due to similar love of great television (thank you Denny Crane). All of this to say, we tend to be attracted to people who relate to us on our most common levels. Some of these levels aren’t a constant barrage of real estate facts and figures. It is the real life relationships that sometimes start in the most innocuous ways.

- Dale Chumbley

Twitter is a way to connect with people on a very basic level. It’s amazing just how much you can learn about someone — good and bad — in a medium like this.

Flood the Twitterverse with real estate updates, listings, and self-promotion and you’ll swiftly find yourself talking in a vacuum.

- Jay Thompson

So, naturally, the question is: why such a difference in approach between Lawyer Twitter and Realtor Twitter?  See for yourself by looking at these two legal twitterati: Kevin O’Keefe, and Doug Cornelius.

Is it that lawyers are naturally more reserved, naturally more concerned about ‘gravitas’ and ‘brand enhancement’ via Twitter, while realtors are more concerned about making ‘real connections’ and not flooding the Twitterverse with real estate updates, as Jay Thompson says?

Is it the difference between the two professions?  Is it the difference in the audience?

I have no answers, just questions.  But then… that isn’t unusual, right? :)

-rsh

The 900-lb Gorilla Cometh

There are really very few voices in the RE.net I respect more than Russell Shaw‘s. I mean, this is a guy who not only talks the talk, he actually walks the walk. His insights and ideas are great in and of themselves, but they are that much more credible in my eyes because he’s a tremendously successful practitioner of the craft as well.

So when Russell speaks on something I’ve written, and criticizes it, that criticism is something I take seriously. He writes:

In some of the posts on various blogs and also on Inman there has been discussion of IDX vs. VOW and how perhaps a national MLS is needed and that some fantastic company using really wonderful technology is going to attract loads and loads of business, pay the agents less and sort of take over. I contend that if such a thing were possible it would have already happened. Zip or Redfin would be making a ton of money (instead of endlessly feeding their companies with investor capital that is not likely to ever come back to them). I don’t think it makes any difference to any big company if only IDX or only VOW is used. About the only people who it will ever make a significant difference to are those agents (not “companies”) who primarily work buyers. They use other people’s listings (via IDX or VOW) as bait to attract buyers who aren’t working with any agent yet.

Desk-fee agents are not only not going away, they ARE the future of our industry. Don’t believe it? Look at the actual trends for the past decade. Our industry is shifting from a totally broker-centric model to 100% companies. Right now, in most parts of the country it is the big national 100% companies who dominate (in terms of numbers of agents). Take a closer look at where 100% started (Phoenix) and you see a very different picture: most of the agents are with 100% companies and the “traditional” companies have changed their splits to the point that they may as well be 100% companies. But it is the less well-known 100% companies that have the largest number of agents. Hint: they charge less. A lot less. My prediction is that these companies and teams of agents (with a rainmaker, mentor) are the future of our business. We will have fewer agents and I believe that is a good thing. A very good thing.

My only defense to this powerful line of criticism is that “past performance is no guarantee of future results.” Let’s get into depth a bit.

IDX, VOW, and Bait

I think Russell is surely correct when he says that buyer agents use other people’s listings, whether over IDX or VOW, to attract buyers. But I submit that if you go a level deeper into this “bait” concept, the difference between IDX and VOW are significant, and that the incentives as currently structured point the way towards a very different future.

It is worth noting that very knowledgeable people think I’m nuts. :) I say, time will tell.

But this whole discussion is being driven at base by the continued shift of consumers to the Internet. That trend is not likely to reverse, as the demographics of the consumer continually changes.

And while Russell is right that buyer agents use other people’s listings as bait, I believe that the trend even for sellers is to look at effective online marketing programs by the listing agent. I mean, could you even walk into a listing presentation today without an integrated online marketing strategy?

So whether you’re talking about bait to attract buyers, or bait to get sellers to list with you, you’re still talking about the Internet and effective online marketing.

Now, throw into this volatile, changing environment these facts:

  1. IDX, while tremendously successful, is a pain to implement due to variety of local rules.
  2. VOW, while tremendously open, has that “signup” provision that is a major barrier to consumer engagement.
  3. Only public facing MLS websites (and possibly Realtor.com) are free of either restriction, under the NAR-DOJ settlement.

What is the likely outcome?

To me, it appears that the future looks something like this:

  • Public-facing MLS websites become the primary consumer destination sites, with perhaps Realtor.com (depending on how the NAR-DOJ settlement is interpreted vis-a-vis Realtor.com) being the primary national real estate portal (possibly to each MLS site).
  • Brokers (and agents) have enormous marketing advantages if they can convince consumers to signup with them in some way.
  • Ergo, brokers (and agents) who have extremely robust, powerful, and consumer-useful CRM systems married to an effective, consumer-friendly, and content-rich online marketing strategies win the battle for consumers. And winning that battle leads to wining the listings battle, as those brokers (and agents) are able to tell the seller, “We have a database of 95,000 homebuyers, married to our awesome website, and an integrated marketing approach.”

Perhaps it won’t happen this way, but I think the logic is valid.

End of Desk Fee Brokerage?

For what it’s worth, I didn’t come up with the title for my Inman interview. I’m not sure if desk-fee brokerage is going the way of the dodo bird. What I do wonder about, however, is what stops a Third Party Platform (such as Trulia or Homegain or whoever is left standing) from getting brokerage licenses, and leveraging their overall lower cost of operations (from economies of scale) and rolling out a national, desk-fee model, but featuring lower fees for all services that desk fee agents currently receive from their brokerages.

Sperry Van Ness has tried to do this in commercial real estate to some success, and that’s a business that isn’t all that friendly to a desk-fee model. Why it wouldn’t work in residential is something I’m waiting to find out.

Furthermore, as I mentioned above, what happened in the past is not a great indication of what is likely to happen in the future. At some point, especially in what appears to be a historic down market, the extremely thin profit margins of these various brokerages are going to catch up to them. Do they maintain the 100% desk fee model that is yielding less than investment into Treasuries? Or do they at some point decide it’s not worth all the hassle and the risk?

The Connection to Brand

What’s even more interesting is that Russell points out the unfortunate truth: real estate brands have lost so much equity, so much brand identity, that most of them don’t stand for anything:

Take what is currently, factually, the really biggest real estate company in the world, Realogy: other than Sotheby’s what brand do they have that matters? Try none for an answer. What meaningful difference does the general public or even the agent public see between Century 21, ERA, Better Homes & Gardens, or Coldwell Banker (just to name a few)? Which one of those is a “good brand”? (yes, yes, I know, Coldwell Banker is supposed to be their “premier brand”)

Is Coldwell Banker a better brokerage firm to the public than Century 21? Do people across the nation think to themselves, “It would be so great if we could buy our next home from a Coldwell Banker agent”? Ever? Does anyone, anywhere, ever think that? How about, ERA? Does anyone say,”I only want to do business with an ERA agent”? If not, what are those “brands” worth? Not much. Why? They don’t stand for anything. To matter, a brand must mean something in the mind of the public and few national real estate firms have ever done that and then managed to hold on to their position.

So, to start off, general agreement on all points. The big brands in real estate have lost most, if not all, of their brand equity.

Brand awareness is not the same thing as brand equity. So for Century 21 to claim that they are #1 in brand awareness, as they recently did, is actually somewhat meaningless unless the brand itself is connected to a real identity.

However, brand awareness is important. It takes years, decades, and really serious money to build up brand awareness in the minds of consumers. To even get people to recognize a particular logo and see it as being familiar takes real effort. And it does provide tangible benefits. In the case of C21, it meant that at least in a survey, consumers responded that they were most likely to choose C21 to buy or sell a house.

Furthermore, if you have a familiar brand, it takes far less effort to turn it around and give it a real identity. It isn’t easy, but it is doable.

What Russell does not take into account, however, in the brand story is how the brand equity was lost. Perhaps the full story will require far more study and research than my little blogpost here, but I submit that the main way that brand equity was lost by Big Brands was through loss of control over the agents.

Best Buy can put out all the TV ads in the world showing smiling, friendly salespeople talking about some sweet holiday story. I set foot into a local Best Buy, deal with one Best Buy salesperson, and all of that branding effort is wiped out if the salesperson is rude, surly, and a moron. It’s happened to me often enough that I no longer shop at Best Buy unless I absolutely must.

Same thing applies to retail. Bloomingdales was once seen as the creme de la creme of American retail — a true luxury with incredible customer service. Yeah… have you set foot in a Bloomingdale’s recently? Do you feel catered to? Special? Luxurious?

All the branding in the world cannot overcome a bad customer touchpoint, and the people who wear the brand is quite possibly the single most important customer touchpoint.

Take a look at the care with which service-driven industries, such as luxury hotels, select, train, and monitor their frontline staff from the check-in clerk, to the over-the-phone reservation people. If I feel that I’ve been treated less than perfectly at a Westin, I’m pretty sure I can get that employee fired. But at a Best Western? I seriously doubt it.

So in the world of real estate, which big brand really enforces brand discipline down through the ranks to the agent level?

For that matter, how many large brokerages — especially the 100% desk fee models — truly enforce brand message and brand discipline?

If the official brand statement is that “our agents are truly knowledgeable experts”, how many brokers fire agents who aren’t?  How many even test agents to see just how expert they are?

And the 100% desk fee models contributed directly to, and was simultaneously symptomatic of, that loss of control.  With a 100% desk fee model, the broker doesn’t care so much about the consumer, or his brand, except insofar as it would help him bring in agents who pay him fees.  The real customer is the agent, not the consumer.

Sort of tough to “control the agent” and “enforce brand discipline” when that’s the case.

The Gorilla Cometh

So when I predict the future coming of the Big Brokerage, it is based on certain fundamental assumptions and observations.

Brokers will not stay in a 3% profit business forever; either the profit has to go up, or they will get out.

We are currently at the tail-end of an agent-centric industry model pioneered by Remax.  The current shift is away from an agent-centric model towards a web-centric model, because the key to the whole industry is Who Holds the Consumer Relationship?

If Third Party Providers win that battle through superior technology, superior marketing, and superior web-based applications, then they will enable the “desk-fee’ing” of the entire real estate brokerage industry.  At that point, the brokerages might as well go out of business, because the agents don’t need you; they need the Third Party Providers far more.  This is the CoStar/Loopnet future of real estate.

What argues against this outcome is the simple fact that most Third Party Providers are losing money in a rough investment environment, and may not survive to see this beautiful future (for them).

If Brokers win that battle through real investment into technologies that enable a web-centric model, then they can and will absolutely reduce the cost of labor.  They have to in order to make back their investment on the one hand, and to raise the profitability of the business on the other.

What argues against this outcome is that most Big Brokerages do not yet seem to understand this, and in the current market, are likely to be very gunshy about investing in anything.

My current stance is that it is easier for the guys with the money — Big Brokerage — to make the investment, gain control over their agents, gain control over their brands, drive brand discipline through the ranks, and emerge far stronger than they ever have been, empowered by technology, than it is for the guys with the technology to find ways to make money.  Hence, I believe the 900-lb gorilla cometh.

But… I could be wrong.  And it could be the 900-lb bear that cometh instead.

(The agent, by the way, is simply not a player in this battle.  They don’t have the money, and don’t have the infrastructure.  They will use whatever tools are provided by whomever, and decide who the winner will be, but they themselves are not in this fight.)

-rsh