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There’s always something to howl about

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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