Zillow is once again finding itself in the news after a Denver-based Multiple Listing Service notified members that they plan to pull the plug on a listing feed arrangement with Diverse Solutions.

You may recall that Zillow gobbled up Diverse Solutions last year, paying $7.8 million for the Irvine, California-based real estate services company. But that’s apparently not sitting well with Metrolist.

The Denver-based Multiple Listing Service notified members this week that it is scrapping a 4-year-old relationship with Diverse Solutions for an Internet Data Exchange or IDX, the manner by which real estate companies post listings on Web sites.

The reason? Zillow.

“We are disappointed that Metrolist has decided to discontinue the Diverse Solutions IDX feed, effective in April,” according to a statement sent to GeekWire from Diverse Solutions. “This was not our decision and we have asked them to reconsider as it’s not the best interest of real estate agents or consumers. We’ll continue work with current Metrolist customers and offer them all of the support we can.”

Inman News first reported on the decision, noting that it occurred because of Zillow’s acquisition of Diverse Solutions. The message sent to Metrolist members read in part:

As you may be aware, your IDX vendor, Diverse Solutions, was recently purchased by Zillow and no longer holds a valid Agreement for Internet Data eXchange (IDX) with Metrolist.  This means that they will no longer be allowed to provide you with Metrolist IDX on your website.

Diverse Solutions (Zillow) will be able to continue receiving IDX data from Metrolist until April 2, 2012 to allow you time to find a new IDX vendor and continue receiving Metrolist listing data for your website.

Zillow works with thousands of brokers and Multiple Listing Services across the country, and Diverse Solutions has ongoing relationships with hundreds of real estate firms. Many of the commenters on the Inman News story have expressed their disapproval of the decision by Metrolist. (We have a call into the MLS, and will update the post as we hear more).

Zillow’s growing power in the online real estate industry (the company topped 31 million unique visitors last month) has raised concerns of some recently.

Last week, Jim Abbott released a scathing video, denouncing services such as Trulia and Zillow as parasitic listing syndicators, pulling his company’s listings from the Web sites.

Zillow is no newcomer to controversy. Shortly after its launch in 2006, the company took heat from both consumers and real estate agents over the so-called Zestimates, automated home valuations that were affixed to millions of homes across the country.

That controversy continues, but more recently Zillow has been taking shots from the real estate companies and brokerages that are supposed to be its advertisers. Last October, Redfin CEO Glenn Kelman sounded an alarm over the rise of what he termed “media sites,” in essence services like Trulia and Zillow. He noted at the time:

I think we are at the crossroads where the media sites will enslave us, I know that is a colorful term, but if we outsource our brains to them, they are going to make all of the money, and we are going to do all of the work. Or, the brokerages can decide that we have gathered all of this information, we have provided all of the service and we should be the ones who offer the best online experience to our customers. And that’s really the big question.

However, none of the recent chatter appears to be hurting Zillow’s stature on Wall Street. The company’s stock is climbing yet again today, trading just over $32 per share.  The stock is up 39 percent in the past month, along trading well above the $20 IPO price from July.

FOLLOW-UPColorado real estate group explains why they booted Zillow’s Diverse Solutions

 

Comments

  • http://twitter.com/parkerknapp David Milesi

    Are there any statistics out there showing average time on market between listings that are/are not syndicated? Curious…

  • http://blog.findwell.com Kevin Lisota

    This is a huge negative for real estate agents in Denver, and frankly I’m surprised that the Metrolist MLS would be this backwards in their thinking. This is not the same as the listing syndication discussion and the popularity of Zillow. It is about being able to provide effective website solutions to practicing real estate agents.

    All agents need IDX-based solutions to effectively show listings on their websites, and Diverse Solutions has one of the better solutions out there. Now this MLS refuses to re-sign an agreement with them because they are now part of Zillow? Ridiculous.

    • http://www.diversesolutions.com/blog Ricardo Bueno

      Thanks for the support Kevin. We pride ourselves in developing a quality product for our clients and they depend on us to continue to provide an IDX solution that’s proven valuable to them. So yes, we’re disappointed in their decision and think that it’s not in the best interest of real estate agents. 

  • Dot Com Deja Vu

    John, if this is my first visit to your site this month, do you condiser me a unique user even though I have been here many times berfore?

    Check back in about a year on Wall Streets opinion…..

    • johnhcook

      Yes, that is how we judge monthly unique visitors. I am sure you could run annual unique visitors, but the standard we typically see in the industry is monthly uniques. So, we calculate monthly unique visitors for both December and January, for example. Unique visitors, of course, are just one of many metrics Web-based businesses look at. (Page views, time on site, etc. also are important)

      Does that answer your question?We’re just happy you keep coming back month-over-month!

  • http://PhoenixRealEstateGuy.com Jay Thompson

    I don’t understand Metrolist’s decision. At all. Diverse Solutions is widely regarded as one of the top IDX suppliers. Cutting ties with them because they were acquired by Zillow??? This helps the members of Metrolist how? And it serves the home buyers and sellers in Denver how??? 

  • http://blog.redfin.com/ GlennKelman

    To be clear, when I spoke, it was in favor of liberalizing MLS rules to ensure that brokers could continue to compete effectively with Zillow and others in building websites and mobile tools, and specifically so that Redfin could publish data about real estate agent performance. But I specifically rejected the idea of withdrawing listings from Zillow, which is what brokers in San Diego and Minneapolis are now doing. Redfin still sends its listings to Zillow.

    Because Zillow does not actually belong to MLSs, it doesn’t get all the broker-listed homes for sale in almost any American city, but it also isn’t subject to MLS rules. We work within those rules as members of the broker community, but will also advocate, often passionately, in favor of MLS rule changes that help consumers get the best possible information from brokers, and that help brokers compete effectively on the web. If we as brokers don’t compete effectively on the web, we can’t give consumers good value and make a decent living.

    Zillow has recently argued that it is futile for brokers to compete with Zillow at building websites and especially mobile tools, but on this point we do disagree: websites aren’t rated anywhere by consumers but so far as I know, the top-rated real estate applications applications for all major mobile devices come from brokers. Zillow competes with Redfin and other brokers for website traffic and mobile downloads, but Redfin and other brokers help Zillow get more traffic by sharing our listings with Zillow, by including Zestimates on our website, by offering consumers Zillow mortgage quotes and, while we could, displaying Zillow’s for-sale-by-owner properties, which do not pay a commission.

    Notwithstanding the questions raised by brokers in San Diego and Minneapolis about whether a large-scale lead-generation business makes real estate better long-term, we have done this because we feel it is in the consumer’s immediate best interests.

    In any event, we do not compete directly with Zillow for revenue, because Zillow’s customers are primarily real estate agents, and our customers are primarily consumers.So like all brokers, we have a complex relationship with Zillow, even if we have a simple and strong point of view on continuing to liberalize MLS rules so we can remain in control of our destiny and compete effectively online.

    Our argument was for the brokers to give ourselves a fair playing field in competing online, not about syndication or MLS vendors.

    • Bob Wilson

      “Because Zillow does not actually belong to MLSs, it doesn’t get all the broker-listed homes for sale in almost any American city, but it also isn’t subject to MLS rules.” 
      This is the sole reason Zillow bought DS. They want the RETS data. That gives them EVERYTHING. 

      Hats off to Metrolist and the other Boards that are following suit. 

      • http://blog.findwell.com Kevin Lisota

        No it doesn’t give them the data Bob. Enforcement of IDX agreements will not allow Zillow to use MLS data other than to power agent IDX websites with DS. It doesn’t allow them to use the data on their own site, as they are not MLS members.

        They are bright enough to know how all of the MLS restrictions work, and are know full well that they can’t run IDX for agents without adhering to the rules.They bought DS because they want to offer a wider variety of services to their agents.

        • Bob Wilson

          Kevin, what they do with the data is in theory governed by the individual agreements they have with each mls entity, but there is no way for you to determine the source of a listing on Zillow. 

          I am fully aware of the data available via a RETS feed as I built the 1st VOW in California over 10 years ago and have used RETS feeds ever since. 

          • http://blog.findwell.com Kevin Lisota

            I am aware of what is available in these feeds as well, as I have one from our local MLS (that I wish was RETS!)

            As a customer of both Diverse Solutions and Zillow, I spoke in depth with Spencer Rascoff at Zillow after the acquisition and am quite positive that their motivations are not to sneak in better listing data in violation of MLS data use agreements. Their relationships with brokers, agents and MLS boards are simply too important to the rest of their business to try a trick like that.

            I am certain that they intend to use Diverse as a way to increase the tool set they make available to agents.

          • http://twitter.com/BradAndersohn BradAndersohn

            Hi Kevin – thanks for speaking out.  We do value our relationships and partnerships with Brokers, Agents, MLS boards and the industry as a whole.

            Spencer put together a great article even before all this began about the importance of strategic distribution: http://www.zillow.com/blog/2012-01-30/the-importance-of-strategic-distribution/

            It addresses in detail many of these concerns.
            Here’s a quote from his post:

            “there are some conspiracy theorists who have speculated that Zillow
            will simply flip a switch and take all of the IDX listings through
            Diverse and put them up on Zillow.com.  It won’t happen and can’t…”

          • http://twitter.com/BradAndersohn BradAndersohn

            Hi Bob – Brad from Zillow, just wanted to point out that your comment “but there is no way for you to determine the source of a listing on Zillow. ” is not true. 

            Every listing on our site shows the listing agent and the source it comes from:

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