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What does Zillow.com understand that Trulia.com is missing? “Thou shalt not muzzle the ox that treadeth out the corn.”

I think that there may have been a time, in the blue-sky days of gray-skyed Seattle, when people with two-digit badge numbers at Zillow.com actually thought they might be able to disintermediate Realtors — much as Expedia.com had disintermediated travel agents. No one at Zillow will admit to this, but I suspect that a notion like this could have been in the original design parameters for the hypothetical software they were brainstorming in those days.

If this is true, then, to their credit, they came to their senses. Presumably, they realized, first, that the National Association of Realtors is a ferocious criminal mob that will do anything to destroy perceived competition, and, second, that, as simple as it might seem from the outside, real estate representation is too complicated to be automated cost-effectively, at least for now. Instead, Zillow.com made a conscious and thorough-going decision to partner with real estate agents and lenders, offering them exposure on its platform in exchange for building out its content.

You could argue that Trulia.com made a similar resolution, but it seems more likely to me that the San Francisco start-up is simply aping Zillow’s partnership with individual practitioners without really understanding it.

From a distance, the differences in the partnering relationships of the two companies could not be more stark. At Trulia, the most important kind of partner is the one who can deliver the most listings. The hierarchy runs from brokerage chain to brokerage to broker to agent to seller.

Zillow’s hierarchy is the other way around: The most important source of information about a home is that home’s owner. Next comes the agent, followed by the broker, the brokerage and the brokerage chain.

In both cases, higher parties on the hierarchy have the power to override — and thus usurp — the contributions of lower parties. What this means in practice is that sellers and their listing agents are regarded as being the least authoritative sources of information at Trulia — and therefore the last in line to receive practical benefits from the leads that might be generated by the on-line reiteration of the agent’s listing of the seller’s home. At Zillow, the opposite is true: The seller and then the listing agent are regarded as being the sources of the most authoritative information about the home and are therefore first in line to receive inquiries about the listing.

That by itself is significant, since — ignoring all other factors — it argues that sellers and listing agents should devote more of their time to improving their listings on Zillow, and less to toiling in Trulia’s fields.

But what is more, real estate listings on Zillow.com offer significantly greater opportunities for improvement than do those on Trulia.com. Moreover, the improvements that can be made on Zillow yield substantially richer opportunities for making contact with potential buyers than do those on Trulia.

I’m not beating up on Trulia. They have every right to do business however they choose. I believe that their refusal to link back to the canonical sources of their listings is symptomatic of an overall hoarding mentality, contrary to the spirit of the net.economy. But if they are wrong, the marketplace will mete out the appropriate punishment.

But the interesting thing to me is what we might expect as a consequence of Trulia’s having been wrong.

For example, it seems plausible to me that, over time, consumers are more likely to prefer real estate listings that are richer in information, as against those that are poorer in details. If this is true, by giving sellers and agents valuable incentives for improving its content, Zillow would seem to stand a much better chance of winning the battle for eyeballs in the long run.

This disparity of quality of information and quality of contact opportunities is replicated throughout both sites. Zillow provides more opportunities for practitioners and consumers to connect, Zillow provides a much richer — and infinitely more link-rich — profile page. And Zillow does not “muzzle the ox that treadeth out the corn” by refusing to link back to the sources of the information it displays.

Both sites want practitioners to flesh out their content with on-the-ground details, but Zillow not only provides many more opportunities for doing so, it pays substantially higher link benefits for having done this work.

And here I am not pimping Zillow. Both of these companies are venture-capital-funded start-ups. There is no guarantee either one will survive. The point is this: Which model is more likely to induce individual sellers and practitioners to provide added-value content? And which model is more likely to appeal to information-seeking consumers?

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  • 15 comments

    15 Comments so far

    1. Todd June 3rd, 2008 8:56 am

      “Information wants to be free” – Steward Brand

      That statement trumps anything the NAR can muster, and it’s the spirit of Zillow, always has been.

      http://en.wikipedia.org/wiki/Stewart_Brand

    2. Bob Wilson June 3rd, 2008 9:17 am

      “substantially higher link benefits”

      Not true if this is about the no follow. We are talking listings that are temporary pages, not permanent pages that accumulate PR to pass along. Any value from a listing page is short lived, unless you are in the habit of taking listings that don’t sell.

    3. Greg Swann June 3rd, 2008 9:39 am

      No, you’re mistaken, Bob. Property records are temporary on Trulia.com and other listing bots, but they are permanent on Zillow.com. The links associated with a home being for sale will be ephemeral on Zillow, but the other improvements you can make to a property listing will be there — linking back to your profile — forever. As an example, the practice of adding photos to Zillow’s property records — which Tom Johnson has called Zestifarming — is a permanent change. If you list and sell a home, you can put a permanent Virtual Sold Sign on the Zillow record for that property. Trulia.com’s policy of putting nofollows on its links back to listing agents is just a small piece of a pandemic penuriousness about linking back to agents, this by comparison to Zillow.com’s relative generosity.

      In fact, the value structures of the two companies, with respect to sellers and listing agents, are aligned at opposites polarities. Zillow.com is sellers and agents first. Trulia.com is sellers and agents last. This is reflected consistently in the software architecture of each company — and, not coincidentally — in the responsiveness of each company to end-user dissatisfaction. If Trulia were to get rid of the nofollows on its links back to listing agents, that would be a move in the right direction. But, in fact, Trulia has an inverted value structure that would require a full rewrite of its software to correct. If this turns out to be a matter of significance to consumers going forward — and who is prepared to argue that skimpy for-sale listings will be preferred to infinitely extensible real-property records? — then Trulia will have made a fatal mistake from the birth of the company.

    4. Cheryl Johnson June 3rd, 2008 12:49 pm

      One other small, but important, point. I think Zillow’s interface is simply easier to use.

    5. Bob Wilson June 3rd, 2008 3:37 pm

      Property records are temporary on Trulia.com and other listing bots, but they are permanent on Zillow.com.

      True, and I should have made that distinction earlier, because it is why the no follow on Trulia is unimportant and the Trulia bashing on SEO grounds is without merit.

      As you pointed out, they are vastly different animals, each with their own issues. Trulia’s database of properties is pathetic, while Zillow’s Zestimate is a laughingstock as it is unable to adjust to a rapidly changing market in either direction.

      Zillow allows me specific benefits, while Trulia can also be a boon for the listing agent with a large inventory. Both can be manipulated to my benefit.

      The upside to the petty argument over their link structure and architecture is that it blinds many to the opportunity that does exist. That said, I believe only a relatively small amount of agents will refuse to let Trulia advertise their listings because of the SEO factor. Those that do in my market will see it used against them. I can imagine the post now – “Why Some Agents Don’t Want Your Listing To Be Advertised Everywhere”.

    6. Jake Massengale June 3rd, 2008 9:34 pm

      Greg,

      I don’t know what you expected from these companies. They are both venture backed, thus income is their number one goal. They are not looking for the best way to advance online real estate or help Realtors. They will have one business model to gain market share and then another business model to monetize once they have achieved sizable market share. If any of them can gain enough market share, they will start to charge for everything they can think of. Much like R.com. Expecting T to give up no follows to help out the Realtors is odd. They get a ton of their traffic from their long tail and they are fighting to become profitable and stay alive. They would never give up this additional traffic; their investors would not let them. Their goal is to make money. The first real step in the transition of T’s model was to generate leads directly from their website and not just simply link the consumer through to the agent’s website. Most agents will not pay for click-thru’s, because most agents can not track conversions from their own website. They will pay for advertising if they can see specific leads sent to them from a website.

      I read all the blogs and I have been amazed at how so many bloggers (not specifically anyone from this site) describe RE 2.0 as this new approach to business. That these companies are trying to advance the industry and partner with Realtors. Develop open online market places and communities that connect buyers and sellers just out of the goodness of their hearts. That RE 1.0 companies are these bottle neck lead gen sites that are only trying to make money from Realtors.
      There is no Utopia. All companies have to make money. RE 2.0 companies can not come out of the box charging for things until they build traffic and market share. They have to come out with flowers and open hands; they have nothing to charge for at first. Z did not invest 90m to generate 5m a year from EZ ads. These companies can not cover their overhead with banner ads; they will have to generate the majority of their revenue from Realtor or seller fees. They will end up looking very similar to RE 1.0 companies, with some updated features. The features that work will be quickly copied by the RE 1.0 companies.
      I don’t blame any of the RE 2.0 companies for doing anything they can to gain market share or make money, they have to. They don’t have an option, you can’t blame them. Their investors are looking for big returns.

      Jake

    7. Greg Swann June 3rd, 2008 10:55 pm

      Hi, Jake. You are just one Unchained Epiphany away from waking up in a brand new world. I won’t bother to describe it to you, because you won’t believe it until you see it with your own eyes. Since the Dark Ages, at least, we have lived by the creed that lying, cheating, stealing and hoarding are efficacious. Every bit of that doctrine is worse than false — theft is the path to squalor, not splendor — but this is something each of us has to learn on our own. If you stick around here, you’ll find plenty of testaments to true splendor, but you’ll still have to find it on your own path.

      I wrote this in email to Zillow’s corporate management today, just a small encomium to a very big idea:

      I hope Zillow makes it through the shoals of high finance — not because you have a great business, although you do, but because a canonical, extensible database of all real property is a noble undertaking, finances be damned.

      This is an insanely great thing they are doing, ennobling just to see it. Surely an essential component of splendor is the ability — and the willingness — to take delight in the sublime.

    8. Lenore Wilkas June 4th, 2008 1:12 am

      Greg, both have ad models for revenue. Ha, ha, ha… sorry about that, had to laugh because it will be a very long time before any site makes their revenue target with ads online. They’re getting there, but still on a real estate site who’s looking at the ads?

      Trulia started out looking like they were going to best Zillow, but now I think Zillow will be the winner. I agree with your comments about an agent’s ownership of the property. I like being able to go in and put down current data about the property and selling price when it sells. Everyone goes there to find out what their Zestimate is, and since they’ve improved their algorithms they’re finally more accurate. I used to tell my clients to stop wasting their time, now I don’t. It’s just another tool for them to understand the market and the micro-economics taking place in their city or neighborhood.

      Trulia is doing some dumb things in the way they’re taking their listings and in doing so, they’re turning the industry against them. Bad idea, Trulia. Zillow on the other hand, is trying to forge partnerships with agents. Trulia could learn something here.

    9. Jake Massengale June 4th, 2008 8:42 am

      Your eloquent sarcasm may fall on deaf ears of the thousands of travel agents that no longer have a job due to your new noble friends.
      The mighty dollar will be the compass for these companies, as it is with all other companies.

      Time will tell

      Jake

    10. Kevin Tomlinson June 4th, 2008 8:48 am

      Greg

      Here’s the big issue with Zillow vs. Trulia, at least for me:

      For example if you Google: 6301 Collins Avenue, Miami Beach, FL, Zillow isn’t even a player.

      I think Trulia has become a big player because they have zillions (pun intended) of pages in Google.

      Zillow isn’t big here in South Florida, but Trulia is becoming more and more everyday because their results in the search engines.

      From what I have learned in the last few days, I am going to start “SEOing” my MLS comments just like the brokerage who hijacked my listing in Trulia.

    11. Greg Swann June 4th, 2008 9:00 am

      > thousands of travel agents that no longer have a job due to your new noble friends

      You’re saying that things should be done inefficiently in order to create jobs? As I said, theft is the path to squalor. It’s raining soup, Jake. You owe me a beer when you finally figure that out.

    12. James Boyer June 4th, 2008 2:09 pm

      Another great article Greg, Keep up the great work, and don’t let anyone dis wade you from finding the real truth and telling it.

      Trulia needs to stop trying (and succeeding at) tricking the search engines into thinking that the data on Trulia is the primary source and the data on the REALTORs sites is the secondary, when in reality it is the other way around.

      Properly addressing the No-follow issue will take care of this.

    13. Jake Massengale June 5th, 2008 6:17 am

      >You’re saying that things should be done inefficiently in order to create jobs?

      Of course not, I am saying that they don’t care about you any more than they cared about the thousands of travel agents that they put out of work. They care about making money, just like everyone else. So you complaining about the no-follows is a waste of your time. They needed you to gain traction in the market so they played nice at first, now you need them for their incredible SEO and traffic. Soon they will either get you to pay for their services or they will go out of business.
      I think many Realtors are still wearing Rose color glasses when it comes to these groups.

    14. James Boyer June 5th, 2008 1:25 pm

      >Soon they will either get you to pay for their services or they will go out of business.

      With the real estate market not likly to improve much before mid 2010 according to more than a few economists, the number of REALTORs who go out of business is likly to be huge. Perhaps that will also have a fairly harsh effect on Trulia as well.

      Many REALTORS are still wearing the Rose colored glasses as you said Jake, but then again many of these same REALTORS may not be practicing real estate by the time the market moves into its next phase.

    15. [...] This is what I was talking about last week: For example, it seems plausible to me that, over time, consumers are more likely to prefer real estate listings that are richer in information, as against those that are poorer in details. If this is true, by giving sellers and agents valuable incentives for improving its content, Zillow would seem to stand a much better chance of winning the battle for eyeballs in the long run. [...]