Home MLS & Associations Zillow Acquires Postlets; Perceptive MLS CEO's Draw Up War Plans

Zillow Acquires Postlets; Perceptive MLS CEO's Draw Up War Plans

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As you have probably heard by now, Zillow has acquired Postlets, the popular listings syndication platform. The initial reaction has been quiet, or supportive.

Brian Boero of 1000watt Consulting wrote about the acquisition:

This comes just a few months after Move, Inc’s acquisition of ListHub, a deal that upped the competitive ante between the leading online real estate sites. I likened this acquisition to Move “Cutting in” on the content/distribution dance between Trulia, Zillow and their industry listing partners.

It was a smart play by Move. And now Zillow has countered.

Postlets, while claiming 500,000 registered users, is to my knowledge a smaller syndication player and has struck me as more agent-focused than ListHub, which serves many large brokerage companies.

And Matthew Ferrara of Matthew Ferrara & Company tweeted (in response to my tweet):

Note that my immediate reaction to the news was, “What the hell is Zillow thinking?”

Given that Move has already acquired ListHub, and commercial real estate software giant Yardi has acquired Point 2, leaving not a whole lot of potential syndicators for Zillow to buy up, that reaction may seem puzzling. Let me explain.

Listing Syndication is One Thing; Postlets Is Not Mere Syndication

My reaction is based on the fact that Postlets is not a mere listing syndication channel like ListHub and Point 2. Unless ListHub and Point 2 have changed their services dramatically, both are what you’d call “mere syndicators”. They take listing data from the MLS and then send that to various publisher websites.

This introduction to the Syndication Dashboard for Brokers PDF from Point 2 makes it abundantly clear that Point 2 works with the MLS. Sample quotes:

Prior to the Syndication Dashboard being available to you, you will receive numerous emails from your MLS/Association regarding syndication through Point2.

The registered email address that you use for your MLS system will be displayed. This is the email address where all of the
prospect emails will be sent.

Yes, Point2 syndicates to various websites, but the data that it syndicates begins with the MLS. Point2 works directly with MLS in order to ensure accuracy, as well as various MLS rules regarding syndication (e.g., opt-out).

ListHub is no different. Everything begins with the listing being entered into the MLS:

In contrast, here’s what Postlets is all about:

Note the first sentence: “Create your listing here.” This is not mere syndication. And indeed, look at the actual listing creation screen:

If I’m the CEO of a MLS, this looks a whole lot like a rudimentary Add/Edit system of the MLS platform. Because it is a rudimentary Add/Edit system of the MLS platform. Since I haven’t gone past this initial screen (photo, courtesy of Matt Dollinger, whom you should be following on Twitter), I don’t know exactly how rudimentary it is.

And based on that, I am immediately drawing up battle plans to kill Zillow before it’s too late.

Paranoid Doesn’t Mean They’re Not Out to Get You

As Brian points out in his post, the battle to “acquire, control, monetize and measure listing data” is truly intense. The resistance to RPR was fueled in large part because MLS’s perceived RPR as a Trojan horse that would ultimately replace the MLS with a national MLS.

But you know what was held up consistently as the number one reason why RPR is not a competitor to the MLS? Its lack of an Add/Edit module. There is no way to get listings into RPR, except through a participating MLS. Ultimately, that fact (combined with tireless work by the RPR crew) led many MLS’s to agree to implement RPR, however tentatively and however temporarily.

Postlets is precisely an Add/Edit module connected to a listings syndication platform, and that has now been acquired by a top five real estate portal. Until today, I’ve usually heard Postlets mentioned in the context of Craigslist, because most MLS’s do not syndicate data out to Craigslist. That may have been why Postlets needed a way to allow agents to enter listing data directly into its system.

Whatever its origins, however, fact is that Postlets is not so much an alternative listings syndication platform as it is a rudimentary alternative MLS. Note, for example, that Postlets provides a “beta” feature called Postlets OUT, which provides an XML feed to display listings on any subscriber’s website (or Facebook page or blog… it’s XML – it can be worked with and transformed). Now that Zillow owns Postlets, exactly how difficult would it be for a broker or agent to opt in to a “Postlets OUT Premium” that allows for all the listings in Zillow to be put on his website? It would take maybe a week of development. Shall we call this feature the “Zillow Data Exchange”, or ZDX?

Sure, Postlets lacks the Offer of Cooperation and Compensation; yes, it lacks strong Compliance. But if Zillow + Postlets does take off, it would not be particularly difficult for Zillow to put in an Offer of Cooperation and create a Compliance team.

The one unique value of the MLS in the panoply of real estate technology is its control over original data entry. This is the piece that even Google with its Real Estate Places pages could not overcome. (Granted, many MLS platforms are so horrible in user interface and design that it appears sometimes as if the MLS wants to alienate its users and drive them to alternative solutions, like Postlets. But oftentimes, that isn’t the fault of the MLS’s themselves, but of the technologically backwards vendors they selected. A whole other topic….)

And that is why I’m genuinely puzzled at Zillow’s acquisition. One of three things will happen as a result.

One, Zillow will turn off the “Create your listing here” feature of Postlets. But then, the value of Postlets to its existing customers — who are using it, after all, to syndicate to sites that the MLS refuses to syndicate to — rapidly approaches zero. But this is the only way I can see Zillow coexisting with the MLS world.

Two, Zillow will promote Postlets as its syndication solution, and leave in the Add/Edit feature. In that case, any MLS that continues to work with Zillow is selflessly throwing itself on the funeral pyre so that Zillow can be reborn as the United States MLS. Those MLS’s should just save everybody a lot of time and close their doors right now; perhaps some of their people can get jobs at Zillow. Plus, it’ll take some time for their subscribers to move over to the new ZillowMLS, so might as well give them a headstart on training and moving the data over.

Three, Zillow will promote Postlets as its syndication solution, leave in the Add/Edit feature, and every single MLS in the country will pull its listings from Zillow. Brokerages, who currently have a very loud voice in governance of their MLS but have no voice whatsoever on Zillow’s Board of Directors, will have to make a decision as to which important entity to support: the MLS, or Zillow. If any MLS was on the fence about the Syndication Bill of Rights, this acquisition should push them off the fence. Note that major franchises, such as Coldwell Banker, who supply listing feeds to Zillow should look twice at the implications of this deal… and then look again.

In fact, if I’m Curt Beardsley or Errol Samuelson of Move, who acquired ListHub for a wholly different reason, I’m banging the phones hard tonight. This is an early Christmas gift from their arch-competitor.

So, we can wait to see if Zillow makes any further major announcements about Postlets, specifically regarding the ability to create listings directly within the system. But right now, less than 24 hours after the announcement, I’m left puzzled as to why Zillow would make this move given how paranoid MLS’s are right now, how much on the edge many of them are, and how troubled many of them are. Spencer Rascoff is one of the smartest guys in our industry; did he just not foresee this possibility? Did he think the MLS’s were weakened enough that he can now go to war with them directly? Or did he need to acquire a syndication firm for an upcoming IPO filing, and he fully plans to shut down the Add/Edit feature that is such a threat to existing MLS’s?

I don’t know, of course, although I would welcome any clarification.

Apart From That Whole Going to War Against the MLS Thing…

Apart from that niggling detail, yeah, this was a good acquisition by Zillow. /scratch head vigorously

Your thoughts and questions are, as always, welcome.

-rsh

16 COMMENTS

  1. If Zillow’s evil master plan is to create a national MLS, then they would have created a very slick and sexy listing entry function for agents already. Their technical capability is an order of magnitude greater than Postlets, so one of their guys could whip out something like this in a matter of weeks (days?). No, this isn’t a technology buy.

    Postlets may have agents pumping “a lot” of listings into their system (maybe), but I doubt they have more than 5% of any specific market. So they aren’t buying a pristine source of listing data (not that Zillow cares about or needs pristine data)

    If anything, I’m guessing that this is an SEO buy. If Postlets widgets are embedded in zillions of other sites, then their SEO wizards might know how to convert this to higher authority for Zillow. Whatever they are doing, I don’t see how buying a bit player will have any significant impact to anything.

    A first step to a national MLS? Nah, a bit paranoid me thinks. It’s safe to take off the aluminum hat and crawl out from underneath the bed.

    • I did not say, and do not know, whether Zillow’s master plan is to become a national MLS. I have speculated as much in the past, but have no way to confirm nor deny that. Having said that, if Zillow were to release its own slick Add/Edit function, that’s the same day that every MLS currently syndicating data to Zillow cuts off the feed.

      I don’t think Zillow bought Postlets for the Create a Listing feature; they bought it for whatever reason they bought it for. But my point is that Zillow had better do something about that particular functionality, and make a statement as to what they’re going to do about it pretty soon. MLS’s are a fairly paranoid bunch, and frankly, for good reason.

      • “if Zillow were to release its own slick Add/Edit function, that’s the same day that every MLS currently syndicating data to Zillow cuts off the feed.”

        If MLS’ shut off their syndication pipelines to Zillow/YRE! – they will just speed up the process of becoming irrelevant to an agent/broker. Agents and brokers are going to syndicate their listings with or without their respective MLS. I don’t see how making a move like that would make any sense for an MLS?

  2. Hey Rob – A lot of a lot of speculation about what this acquisition means for the industry! Outside of this acquisition, Zillow has partnered with hundreds of MLS & Brokers both directly and through companies like Listhub & Point2. We highly value these relationships, as usually the listings we receive from them are of a higher quality, which the millions of home shoppers who visit the site each month appreciate.

    • Heya Sara 🙂 I don’t think this is a whole lot of speculation at all. It is, rather, a description of the issues that MLS’s think about these days. And various phone calls and emails from those people confirm for me that I’m not that far off mark. You guys are going to need to make some sort of a statement about the Create a Listing feature in Postlets and what you all plan to do with it/about it.

    • Read the post again, Drew. I didn’t say Zillow wanted to become a national MLS. I said I was puzzled why Zillow bought Postlets, given that it would trigger the paranoia in the MLS community, and that I believe Zillow now has to take a stand on the Add/Edit functionality. But take away the Add/Edit feature of Postlets and what do you really have with that sucker? It isn’t as if syndication itself is beyond Zillow’s ability to self-develop?

      I just don’t agree with Matthew that we’re in a post-MLS world and that Zillow can afford to blithely ignore how the MLS is going to look at this thing.

  3. Just a slight correction here, as I have been a client of Point 2’s until very recently (but still a known supporter). They work with the MLS’s they have agreements with. Unfortunately, they do not have that agreement with all of them, and then the accuracy of the listing information is up to the individual agents to keep updated. That left a lot to desire for me here, as my MLS did not have an agreement with them. I still wish they did. Agents tend to update the MLS but not their individual sites.

    • You’re pointing out exactly why I don’t believe Zillow would not want to piss off the MLS too much. “Yet another place to enter listings” is not what is going to make brokers and agents all too happy…

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