Michael Wurzer and others are tying themselves up in knots trying to prove that they understand what Zillow is doing wrong. My take is that they don’t even understand what Zillow is doing, so, necessarily, it’s going to look wrong to them from their frame of reference.
I said this the other day, and I thought I did a nice job, twenty-five words on the nose:
Web 2.0 creates an ongoing community of active users by integrating a user-modifiable database through an interactive, as opposed to static, web-based interface.
The important word is “community.” Wikipedia.org is not building a database of encyclopedia articles. Ebay.com is not building a database of merchandise.
Criticizing — or praising — Zillow about its databases is all but completely beside the point. They’re not building databases. They’re using databases — and incentives to user-initiated database maintenance — to create a self-sustaining community of users.
Ebay.com is not a reproducible phenomenon. Wikipedia.org is not a reproducible phenomenon. The technology is easy. Venture capital abounds. But the niches are already occupied, and neither of those two communities can be replaced as long as they are serving the needs of their members. It does not matter how much money you throw at the problem, they cannot be supplanted.
This is what Zillow.com is aiming for, in my opinion. The listing.bot traffic is nothing. It doesn’t amount to a fart in a gale of wind. Zillow’s own very impressive traffic is nothing, as we’ll see in a moment. What they want is a community of users as loyal as the Wikipedians, and potentially as profitable to its professional users as Ebay is.
Let’s look at the numbers: Zillow is getting four million hits a month, it says — with others saying otherwise. If each of those four million users is visiting three pages on average — which seems like a lot to me — then we’re looking at twelve million pageviews a month. It’s possible they do better than this, but it doesn’t much matter, as we’ll see. Assume three EZ Ads per page — where the average for now is probably closer to one. That boils down to $360,000 a month, $4.32 million a year. With current traffic, the EZ Ads system won’t cover the payroll.
I haven’t done the math on the listing.bots, but I have to assume their numbers are equally dismal. The point is that the number of users has to go up dramatically. The listing.bots offer one draw to an evanescent cadre of potential users. Zillow.com is attempting to offer so many different types of draws — so many different types of activities, so many opportunities to benefit by that activity — that the community itself becomes its own draw, its own self-sustaining reason for being — exactly like Ebay.com and Wikipedia.org. There is no telling if they can pull this off, but they are completely without competition in making the attempt.
Here are some numbers of my own. So far, I’ve put up four Real Estate Guide (wiki) articles. My results?
- The perils of pre- and post-possession (63 hits)
- Best time to list your house? Thursday morning (94 hits)
- Best time to make an offer on a house? (685 hits)
- Make your first open house the only one (374 hits)
Who is reading the Real Estate Guide? It looks like a lot of buyers to me. If that’s true, it’s a dramatic shift from Zillow’s historically strong appeal to sellers.
Jonathan Dalton has gone farming, which I think is a commendable idea. The Zillow 5 functionality makes it possible to prospect on-line for no cash outlay and a very low cost in labor. He found a brokerage disclosure that I had missed, so I’ll have to go back and correct the 24 homes I’ve reported on so far.
We have photos on hundreds, possibly thousands, of homes, and this is another chore I want to get to. Asserting yourself on every listing and FSBO in your farm is powerful, but attaching your profile to every single property makes you the neighborhood superhero. I also want to play with MLS reports in Javascript to see if I can come up with a faster way of doing these jobs. The real challenge is going to be streamlining the hotsheet process to take information down when listings sell, cancel or expire.
FUD Factor: Best appeal to Fear, Uncertainty and Doubt yet: Why is Zillow’s Q&A feature an awful, horrible thing? Because it will make it harder for sellers to steamroll buyers. Yikes!
Technorati Tags: blogging, real estate, real estate marketing
Michael Wurzer says:
We’ve come full circle. When I explained why I thought Zillow was going about creating a community the wrong way by trying to end-run listing brokers and agents, you said “An MLS database has the same defect as Trulia’s database: It’s temporary, and therefore has only a sporadic and temporary appeal to end users.” Now that I’ve explained why an MLS database isn’t temporary, you’re back to the “community” thing. What’s now obvious is that the wonder of Zillow is merely in your idealized future state, when they have finally reached the critical mass you believe they will. I’ll repeat and re-phrase, I don’t see Zillow achieving critical mass by trying to end-run listing brokers and agents, who most definitely have an editable and permanent database they use a lot every day. Will Zillow’s attempt to replace the MLS community and database by allowing all others to edit the database succeed? Our respective theories are presented and what’s left now is to wait and see whether your idealized Zillow state comes to pass or not.
April 9, 2007 — 4:42 am
James Nicholson says:
I think your analysis of Zillow’s attempt at creating a community is exactly right. In addition to increasing their page views, user generated content also allows Zillow to build a proprietary knowledgebase. There are lots of automated valuation services out there now, but if Zillow adds in user content then they have a permanent competitive advantage.
My only quibble is your statement about Zillow getting 4 million hits. They actually claim 4 million unique users, which is different. The same user can come back throughout the month, but would only be counted once. Because of this I would think the average page views per user are much higher than 3 – probably closer to 10 or 12. But as you note, either way Zillow needs to bump up their traffic to generate some serious revenue.
April 9, 2007 — 10:35 am
jf.sellsius says:
You miss the point of the post Greg. It is not a question of honesty at all, or fear, but practical reality. The question is: will Q&A help or hinder the sale of property? We think it may hinder it for the reasons stated in our post.
Question for you: Do you believe agents need their client’s consent to list on Z, given the Q&A component? Should they explain what the Q&A entails? We think the answer is YES.
April 9, 2007 — 10:46 am
Greg Swann says:
> It is not a question of honesty at all
To the contrary. The issue you raise is about nothing but honesty. Of your list of 24 questions, fully 17 are material facts the buyer has the legal right to know:
The remaining seven questions are all topics wise buyers should raise and wise sellers should disclose:
I think the dust you have tried to kick up is purely tendentious demagoguery, made worse by your not disclosing your pecuniary interest in attempting to frighten users away from Zillow.com. Potentially, they stomped on a lot of business models last week, including yours. That’s too bad. But your attempt to portray transparency, full disclosure and redress of the information asymmetry between seller and buyer as bad things is beneath contempt.
April 9, 2007 — 12:17 pm
Tim says:
Ambrose Bierce, acclaimed American novelist and lecturer, was reported to rather dismissive towards his critics. One of his novels proved to be an absolute flop, and critics everywhere panned it for the trash that it was. He famously responded by saying that none of the critics understood what he was writing about, and that “they just didn’t get it.” One critic responded by saying that apparenently there is no one in the world smart enough to understand Mr. Bierce’s insights into the human soul. That’s a lot of smart people who “didn’t get it”
Sometimes I feel like one of those critics when reading the undauntable repartie (french spelling) of Mr. Swann–especially in his latest sribblings on Zillow. With all due respect, Mr. Swann, give the rest of us a little credit. Mr. Wurzer has many more years of experience than you and, I would argue, considerable more expertise than yourself in this area. In my estimation he is far more grounded in the world as it exists today rather than the hypothetical world of Zillow future shock.
It’s better to be part of the conversation than to always see yourself above it.
April 9, 2007 — 12:37 pm
jf.sellsius says:
Greg, still you miss the salient points of our post. But no matter. (Perhaps your zillow favoritism has its own motivations) But, to the point— you praise Q&A without ANY evidence to support its usefulness in facilitating the sale of homes. Intellectual dissection dis not enuf—it must be tested in the real world of real estate sales. Does it work to sell homes? We merely pose the questions and give our opinion. We think it may not, for the reasons given in our post (also see the comments).
Are these not fair questions?–
Assume I am a homeowner who does not use the internet or ever heard of zillow.
1. How do I flag comments being made about my home?
2. How do I claim my home?
3. Must I be required to do either?
For this homeowner there can be adverse consequences if someone lists my home for sale on Zillow without my consent or knowledge?
Fiduciary duty question: Do you believe agents ought to get their client’s consent before listing their home for sale on Zillow, with the Q&A component? You may not be acting in their interests if they were to say “No”. I assume you asked your client BEFORE you listed their home on zillow and explained the Q&A component, didn’t you? Should other agents do the same?
Pointing out that non-owners (or their listing agents) are listing homes of others for sale & answering questions without consent opens the door to abuse is a fair criticism. The fact that there is a flagging system is an admission that the Q&A can be abused. But that means someone has to be quick on the trigger to catch and deal with flagged items. Until they are removed, poison remains in the well, no? And some items only a homeowner can flag, right? If they do not know someone has listed their home, how then can they flag it? Fair questions, we think.
BTW, we never said anything was bad—we said it might not be good at helping sell a home(ie best for the seller, your client).
Finally, I am curious why you separate some questions as “wise” buyer questions—we think ANY buyer could ask these questions and deserve honest answers.
Thanks anyway for engaging in the dialog. It’s a good thing.
April 9, 2007 — 1:33 pm
Greg Swann says:
> I don’t see Zillow achieving critical mass by trying to end-run listing brokers and agents
They’re not doing this.
> Will Zillow’s attempt to replace the MLS community and database by allowing all others to edit the database succeed?
Nor are they doing this.
What they are doing has nothing to do with the product you are selling. It may in due course make it harder for you to sell that product, but they are not in competition with you. They are indirectly in competition with Sellsius and Active Rain, which is why all that silly, gaseous demagoguery is emanating from those sources.
I have by now twice explicitly answered the question, “What are they doing?” If you truly don’t understand, ask again and I’ll try to find a way to make it plainer.
Or: Simply dismiss me. I have thought a great deal about Zillow.com, in no small part because they don’t bore me: They do things I hadn’t expected. But a commenter has called into question my qualifications to call your perhaps exaggerated yawning into question — with the lord alone left to wonder about his qualifications. And: No one at Zillow has confided in me that their objective is to achieve the status of an Ebay.com or a Wikipedia.org. I could be all wet. Insofar as I am not querying you about their designs — I may be wrong, but I am never uncertain — you can simply snap your fingers and be done of me.
However: If I am right, or even in the neighborhood being right, then this is a show very much worth watching.
April 9, 2007 — 4:02 pm
Greg Swann says:
> (Perhaps your zillow favoritism has its own motivations)
That is to say, you concede that your posts about Zillow are motivated by an undisclosed pecuniary interest.
I have no interest in whether Zillow.com succeeds or fails, or no more interest than any other Realtor who is using the functionality made available in Zillow 5. My immediate pecuniary interest would probably be best served by all of the Realty.bots taking starring roles in Dot.Com.Bomb Part II — a fate from which they are by no means secure.
Moreover, we do a lot here to help Realtors, lenders, investors and ordinary consumers do better in the real estate market. My long-term self-interest as a Realtor would be better served by silence. I freely give away extremely valuable marketing ideas, as do other contributors here. We are all doing everything we can think of to educate and empower the consumer.
I caught you with your hand in the cookie jar, and your natural impulse is to run to the fallacy tu quoque. You could not have picked a worse target.
April 9, 2007 — 4:20 pm
Michael Wurzer says:
Greg, I don’t question your qualifications in any way and you certainly are more experienced than I in selling real estate. I have a good deal of experience creating MLS software and working with brokers and agents, but I’m keenly aware that is far different than being a broker or agent day to day. I read your blog and have engaged in the discussion because I find it very valuable, precisely because you bring real-world in-the-trenches experience to industry issues that impact the MLS business. I also engaged on the Zillow posts because your previous posts have occasionally included local MLSs in your predictions that Zillow will take over the world and that certainly is interesting to me. (To the extent my yawning was too flip, I apologize. Though I want to be snappy in my writing, I do not ever want to be rude. ) Like you, I find Zillow to be well worth watching. There is little question they are now and will continue to have an impact on the RE.net if not RE as a whole, nor is there a question that they are innovating. My main points were simply that they seemed to be stretching unnecessarily with their “report a listing for sale” feature and that MLS systems are permanent even if not consumer editable (yet). Anyway, as I mentioned in my first comment, I believe we’ve covered the territory on this issue, and probably then some. I appreciate your willingness to discuss these issues with me. Hopefully you and your readers also found some benefit to the discussion.
April 9, 2007 — 4:33 pm
Tim says:
This “commenter” is qualified enough to be able to seperate fact (what is) from fiction (what might be), qualified enough to distinguish between (false) prophecy and wisdom, and certainly qualified enough not to presume that a paradigm shift is at hand with Zillow (I’ll happily leave that thankless task to the more qualified fools and philosophers of the world 2.0…
April 9, 2007 — 5:03 pm
Greg Swann says:
> your previous posts have occasionally included local MLSs in your predictions that Zillow will take over the world
FWIW, I don’t think that Zillow has any interest in the MLS business. Listing.bots and IDX systems, yes, but only tangentially. Last December, I referred to it as a NeoPoLiS, a National Property Listing Service. By now, I think I’d express it as a national home discovery service, or even just an incipient national homeownership community.
An MLS system is a home search tool, useful only to professionals. If you say some MLS systems are permanent, I’ll take your word for it. Ours is about three years deep, and even then records for one property listed multiple times are not conjoined.
A listing.bot is a home shopping tool, a toy for amateurs to play with. When we say, “172% of home buyers start their search on-line,” we mean the same thing we would have meant twenty years ago by saying, “179% of home buyers start their search in the classifieds.” In both cases, the denoted media are good places for Realtors to prospect for buyers, but relatively lousy places for buyers to search for homes. Sloppily organized information of unknown provenance, with next-to-no ability to rank by must-haves and must-not-haves. A true home search requires an MLS system — and a professional to drive it.
I don’t think Zillow is primarily interested in either of these. I think their hope is that, by eliciting a conversation, they will have created a self-sustaining discussion of homes in the large, with particular end-goals being rolled into the larger conversation. Not listing, not selling, not refurbishing, not decorating, not razing, not rebuilding, not any one of these but all of them, plus infinitely many more. The permanent record they want to build for every property in the U.S. is less like an MLS or tax record and much more like a scrapbook, details of a general interest, broad and shallow to be sure, but enduring, and gaining in value with each small act of accretion.
The act of accretion is the sine qua non action of the idea, and yet it is a secondary consequence, because the act of accretion is really the next phrase in the larger conversation.
Are they competing with you? Maybe someday, but not yet. Zillow.com’s goal, I think, is to be the nexus of real estate conversation in America, with everyone coming there because everyone comes there. Doable? We’ll see. But no one else is trying anything like this.
I don’t know that I’ve done the job of explaining what I see, but I think this is better than what I’ve done so far. Thanks for pulling me back to it.
April 9, 2007 — 5:13 pm
Tim says:
Having said that, I enjoy reading your unzillowable diatribes immensely.
April 9, 2007 — 5:57 pm
David G from Zillow.com says:
Michael –
Zillow is not trying to “end run” listing agents. We are trying to give buyers’ agents a better platform to promote themselves online. I think that ours is a novel approach. We’ll see if it works. The last time we launched something unique like this was Make Me Move; that feature was a success – but not all features will be.
I do want to be clear though; we value a listing agent’s participation on Zillow very highly. It’s definitely our preference to have the listing agent or the owner tell the Zillow community that the home is for sale. It’s also typically more value to visitors to our site when their questions are answered by the listing agent or the owner. We’re not going to “end run” these valuable contributors any time soon. Listing agents & sellers still have the exclusive right to advertise the listing on Zillow. We don’t plan to change that.
Greg –
Another well thought out post. FYI; James’ guess is more accurate. The great thing about Zillow though, is it is just “day 1” and the community features and adoption are going to be interesting to watch evolve.
I must say, it’s just been cool to be able to really meet and talk with our site’s visitors this past week. I’m enjoying reading and answering questions on Zillow – and seeing people get their questions answered.
This morning, a Realtor e-mailed me via my “contact me” button on my profile page on Zillow to thank me for explaining the difference between her seller’s Zestimate value and list price. That made my day.
April 9, 2007 — 10:10 pm
Michael Wurzer says:
David, your ability to doublethink never ceases to amaze me. I know a few listing brokers and I’m pretty sure most would find these two sentences incongruous when it comes their listings: “Zillow is not trying to “end run” listing agents. We are trying to give buyers’ agents a better platform to promote themselves online.” Every listing broker I know feels pretty strongly that they should be able to control the marketing of their listings. No doubt, many will choose to put them on Zillow. My point has been that this choice should be left to the listing broker, and that they should not be forced into patrolling web sites like Zillow to see whether some other enterprising agent is promoting their listings at all or accurately. Zillow’s approach is focused on getting traffic by pitting agents against each other and my prediction is that you’ll find this does not build a strong community.
April 10, 2007 — 3:51 am
David G from Zillow.com says:
Michael –
Please kick the tires on these features on Zillow. When you do, you’ll notice that only the listing agent can market listings on Zillow and if an LA chooses to post their listing, no-one can update that posting other than you or the seller.
I totally agree that LA’s should be in control of the marketing of their listings. It’s free to market your listings on Zillow, so I’m not sure why an LA wouldn’t post their listings but that’s not what we’re discussing here – rather, it is the discussion about the listing that we’re talking about. What we added last week is a forum for the conversations about real estate that are already happening in the real world. When an LA posts their listing in the MLS or they put up a sign they start a conversation between BA’s and buyers who discuss the listing amongst themselves and will have a few questions for the LA until one of them decides to make an offer. Surely you agree that that discussion is essential to selling houses. All we’ve done is moved it online. As a listing agent, I can’t imagine why you wouldn’t want buyers and their agents discussing your listings?
Agents already compete so I’m confused why that’s a scary scenario but I disagree that Zillow is aggravating that competition. I do hope we provide an edge to the agent who is using our site though.
My point above was just that you’re too closely connecting this single “report for sale” feature with the fact that Zillow is becoming an online community of real estate enthusiasts — the success of the Zillow community is not dependent on the success of this feature. We’d rather have the LA market their home on Zillow and also host the discussion about the listing but we’ll settle for just the discussion if we have to.
There’s no doublethink here; marketing a listing and discussing a listing are two entirely different (but sequential) events. Last week’s release addressed the latter. Check it out.
David
April 10, 2007 — 7:53 am