Category Archives: Technology

On Rupert Murdoch Buying Realtor.com (Part 1)

Rupert Murdoch: the patron of REALTORS everywhere?

Rupert Murdoch: the patron of REALTORS everywhere? (And his wife… oh my… we need more Asians in RE…)

By now, I’m sure any reader of mine knows that we have seen the second major blockbuster deal in the digital real estate space, with Rupert Murdoch’s News Corp agreeing to buy Move, Inc., the operator of Realtor.com, Top Producer, Tiger Leads, ListHub, and other brands. It’s an all-cash offer of $21 per share, which comes to $950 million as of this writing.

There are all sorts of interesting things to think about and wonder about here, and I’m writing this post in large part to understand my own thinking about this deal. Quite frankly, this is very different from Zillow buying Trulia — they’re both portals, in the same business, and they’re getting bigger. This is a media company that has significant digital real estate operations (2/3 owner of REA, the Australian near-monopoly on online real estate ) buying a U.S. portal.

So I put “Part 1″ above, because I rather think there may be multiple parts to this one. Let’s get into it.

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Antitrust Questions on MLS Decision to Screw With Syndication

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Having just spent a couple of days at CMLS, a young man’s fancy turns to questions of MLS-related things. In this case, a middle-aged man’s fancy might turn that way too, since it’s been a while since I’ve been a young man with fancy of any sort.

As most of my readers probably know, RealTracs, a large regional MLS in Nashville, recently made news:

By the end of the month, Brentwood, Tennessee-based RealTracs Solutions says it will limit the information included in direct data feeds it sends to public portals. RealTracs, which has nearly 10,000 members, is also in negotiations with listing syndicator ListHub to limit third-party portals’ display of listing data.

The changes include a four-photo limit; the elimination of several data fields; listing descriptions will be restricted to 150 characters; and public portals will be required to include a link to the listing detail page on the listing broker’s website.

As part of its reasoning behind the changes, RealTracs said consumers deserve a closer relationship with Realtors who provide the work product powering public portals, and brokerage websites can provide a more personal experience for consumers. The MLS also said brokerages should be allowed to manage advertising in ways advantageous to their companies.

Zillow has already said Nyet to the plan:

Now, White says Zillow has informed him it would reject any data feed that did not have complete data and would therefore terminate the feeds of RealTracs listings it receives from listing syndicators ListHub and Point2 on Sept. 23. Zillow is the most highly trafficked real estate portal on the Web with 46 million unique visitors via desktop and mobiles devices in June, according to comScore.

No response yet from Realtor.com, but Trulia has already said it’ll go along with the MLS’s wishes.

I have to admit to being some sort of strange real estate nerd in that this situation makes me wonder about a couple of antitrusty things. But here goes.

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Notorious POD: Episode 11 — Kathy Dryden of Allre.com

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Wow, it’s been a long time, eh? I apologize for the lapse, but as I sort of explain in the podcast itself, I’ve been busy, and there hasn’t been that much going on that makes me want to record one of these.

But… that’s changed with the introduction of Allre.com, a new startup based in San Diego, CA, that really, actually wants to disrupt the industry. Here’s the video presentation from TechCrunch Disrupt:

 


The initial reaction from real estate folks has been… as expected. Just check out the comments to that TechCrunch post above.

I figured, rather than slinging mud, maybe we should get to know the company a bit better, so I asked Kathy Dryden, the Founder & CEO, for an interview. And she granted it. So this episode is about Allre, about disruption, and about my thoughts and opinions based on our conversation.

Many thanks to Kathy for the interview, and for agreeing to reschedule them a couple of times, despite the thousands of emails in her inbox, and a zillion things to do after the TechCrunch debut.

Thanks!

-rsh

Listhub Acquires Point2; I Think of TS Eliot

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[EDIT: Please see the clarification posted below.]

I’ve been hearing rumblings about a big game-changing deal for a couple of days, and this morning, it’s been confirmed. Listhub, a Move entity, has acquired Point2 from Yardi, bringing all listings syndication in the United States under one roof.

From Celeste Starchild, General Manager of Listhub:

Move has acquired the Point2 U.S.-based syndication business to further our shared vision of delivering a single listing aggregation, storage and distribution service.  As one of our key partners, we wanted to make sure that you were among the first to hear this good news.

Point2 realized the benefits to the industry of having a single platform, and ultimately worked with ListHub to help bring it to fruition.  The ListHub vision is to provide the industry with a single platform to improve data synchronization between systems, organize appropriate data licensing provisions for participants, and solve for the fragmentation and duplication of efforts that occurs throughout our industry today. Combining the Point2 and ListHub technologies into a single platform is a giant leap forward in reaching these goals.

Benefits to the industry of the single platform include:

  • Better access to listing data for thousands of brokers and franchises who operate across multiple MLSs
  • Increased accuracy for online listings, as agent-entered listings will be transitioned to MLS-connected solutions wherever possible
  • Enhanced customer service to the industry through a single help desk
  • Ability to better measure the results of online marketing across sites and across MLS markets 
  • Leading data protections for all brokerages through ListHub’s comprehensive publisher agreements
  • Ability for software and website technology companies to focus efforts on innovation for REALTORS®, not managing data from multiple sources

How will the acquisition work?

  • The ListHub platform technology will be provided to all of Point2’s previous MLS customers (in the U.S.)
  • ListHub and Point2 will work collaboratively with each MLS to cutover all of Point2’s U.S. based MLS customers to ListHub over the next six months.
  • The MLS-connected Point2 syndication service will operate unchanged for each MLS market during the period prior to their ListHub cutover date to ensure no disruption in service.
  • Once an MLS market is transitioned, the Point2 syndication service will cease operations.

NOTE: While it’s nice of Celeste to say I am a “key partner”, I assume this was a blast email that went out to their actual key partners. :) As the main thing I partner with Listhub on is karaoke with their people, I doubt the phrase applies to me.

In any event… a couple of thoughts.

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Dear Realogy: What’s Stopping You?

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This is a brief note that I would have put on Facebook or something, except that such things get lost in the tides of time and Facebook’s rapidly scrolling updates. I want to be able to refer back to this at some later point.

At the recent NAR Leadership Summit, there was a panel of major brokerages and franchises. All of the panelists apparently expressed dismay at the number of MLS’s there are in the United States. Then Alex Perriello (my old boss, back in my CBC days) suggested that consolidation happen through acquisition.

From the Realtor.org story on the event:

Talk of a common platform quickly segued into a discussion of how many MLSs each of the large brokers had to join—and each of the panelists, at some point in the discussion, expressed support for MLS consolidation.

“It certainly makes sense for MLSs to start consolidating,” Peltier said. He suggested several smaller MLSs from the same region could partner to create “a consumer site that does not pick winners and losers,” referring potential clients back to the listing broker’s site.

Perriello caused a stir in the audience when he suggested that MLS consolidation should happen “through acquisition,” with larger MLSs taking over smaller ones that aren’t able to adapt.

“It is an exit strategy for some of them,” he said. “People won’t voluntarily say, ‘Well I think we’ll just close up shop.’”

Perriello reminded brokers that they can leverage a history of cooperation that real estate professionals in other countries can only dream of.

“The majority of brokers around the world do not have the benefits of MLS,” he said. “Competitors don’t even talk to each other much less cooperate with each other.”

Well, as someone who has actually spent time and energy and taken major professional risks to drive MLS consolidation via acquisition, only to run into the brick wall that is MLS governance in the 21st century, I have a suggestion in the form of a question.

What’s stopping Realogy from making offers to MLS systems today?

In Q2/2014, Realogy posted $1.5 billion in net revenues, with $269 million in EBITDA and $68 million in net income. Realogy also posted $198 million in free cash flow in the three months from April through June. It’s also a public company, who can offer stock in any acquisition.

I’ve heard Alex and others from Realogy complain about the MLS, about how many there are, about the need to consolidate, etc. etc. for a few years now. So here’s my suggestion.

Start buying the MLS yourself.

You have the cash. You have stock to offer in any deal, so the seller (usually an Association) has upside to look forward to. You’re part of the industry. You have deep talent in managing businesses. Go make an offer, especially in those large metropolitan areas where the NRT is active.

Start with MRIS in the DC area, which is a for-profit entity owned by twenty-some Associations. Offer them $150 million in cash and another $150 million in restricted Realogy stock so that those shareholder Associations can enjoy the upside of Realogy’s stock price rising.

Why not? What’s stopping you?

To those who say that the MLS can’t be owned by a brokerage, since its competitors would flee… there are three major MLS systems I know of (and others likely exist) that are broker-owned: MLS PIN in the Northeast, FMLS in Atlanta, GA, and NWMLS in the Seattle area. All are broker-owned, and the competitors have not fled the system. But if competition is going to be an issue, that’s easy to solve as well.

Offer to sell to brokerages in the affected MLS area shares in a new company that owns the MLS. So Realogy invests $300 million (in the hypo above), forms RealogyMLS to own MRIS, then sells $200 million worth of shares in RealogyMLS to other brokerages. Done.

If you need someone with actual experience in trying to do such a thing, I’ll be waiting by the phone. Or not, as the likelihood of actual action is probably in the neighborhood of the Jets winning the Superbowl this season with Geno Smith at quarterback.

The fact that this seems fanciful should alert us all to just why MLS consolidation remains a favorite talking point, but not an actual action point. We might all wonder why that is.

-rsh