Zillow Acquires Postlets; Perceptive MLS CEO's Draw Up War Plans

As you have probably heard by now, Zillow has acquired Postlets, the popular listings syndication platform. The initial reaction has been quiet, or supportive.

Brian Boero of 1000watt Consulting wrote about the acquisition:

This comes just a few months after Move, Inc’s acquisition of ListHub, a deal that upped the competitive ante between the leading online real estate sites. I likened this acquisition to Move “Cutting in” on the content/distribution dance between Trulia, Zillow and their industry listing partners.

It was a smart play by Move. And now Zillow has countered.

Postlets, while claiming 500,000 registered users, is to my knowledge a smaller syndication player and has struck me as more agent-focused than ListHub, which serves many large brokerage companies.

And Matthew Ferrara of Matthew Ferrara & Company tweeted (in response to my tweet):

Note that my immediate reaction to the news was, “What the hell is Zillow thinking?”

Given that Move has already acquired ListHub, and commercial real estate software giant Yardi has acquired Point 2, leaving not a whole lot of potential syndicators for Zillow to buy up, that reaction may seem puzzling. Let me explain.

Listing Syndication is One Thing; Postlets Is Not Mere Syndication

My reaction is based on the fact that Postlets is not a mere listing syndication channel like ListHub and Point 2. Unless ListHub and Point 2 have changed their services dramatically, both are what you’d call “mere syndicators”. They take listing data from the MLS and then send that to various publisher websites.

This introduction to the Syndication Dashboard for Brokers PDF from Point 2 makes it abundantly clear that Point 2 works with the MLS. Sample quotes:

Prior to the Syndication Dashboard being available to you, you will receive numerous emails from your MLS/Association regarding syndication through Point2.

…

The registered email address that you use for your MLS system will be displayed. This is the email address where all of the
prospect emails will be sent.

Yes, Point2 syndicates to various websites, but the data that it syndicates begins with the MLS. Point2 works directly with MLS in order to ensure accuracy, as well as various MLS rules regarding syndication (e.g., opt-out).

ListHub is no different. Everything begins with the listing being entered into the MLS:

In contrast, here’s what Postlets is all about:

Note the first sentence: “Create your listing here.” This is not mere syndication. And indeed, look at the actual listing creation screen:

If I’m the CEO of a MLS, this looks a whole lot like a rudimentary Add/Edit system of the MLS platform. Because it is a rudimentary Add/Edit system of the MLS platform. Since I haven’t gone past this initial screen (photo, courtesy of Matt Dollinger, whom you should be following on Twitter), I don’t know exactly how rudimentary it is.

And based on that, I am immediately drawing up battle plans to kill Zillow before it’s too late.

Paranoid Doesn’t Mean They’re Not Out to Get You

As Brian points out in his post, the battle to “acquire, control, monetize and measure listing data” is truly intense. The resistance to RPR was fueled in large part because MLS’s perceived RPR as a Trojan horse that would ultimately replace the MLS with a national MLS.

But you know what was held up consistently as the number one reason why RPR is not a competitor to the MLS? Its lack of an Add/Edit module. There is no way to get listings into RPR, except through a participating MLS. Ultimately, that fact (combined with tireless work by the RPR crew) led many MLS’s to agree to implement RPR, however tentatively and however temporarily.

Postlets is precisely an Add/Edit module connected to a listings syndication platform, and that has now been acquired by a top five real estate portal. Until today, I’ve usually heard Postlets mentioned in the context of Craigslist, because most MLS’s do not syndicate data out to Craigslist. That may have been why Postlets needed a way to allow agents to enter listing data directly into its system.

Whatever its origins, however, fact is that Postlets is not so much an alternative listings syndication platform as it is a rudimentary alternative MLS. Note, for example, that Postlets provides a “beta” feature called Postlets OUT, which provides an XML feed to display listings on any subscriber’s website (or Facebook page or blog… it’s XML – it can be worked with and transformed). Now that Zillow owns Postlets, exactly how difficult would it be for a broker or agent to opt in to a “Postlets OUT Premium” that allows for all the listings in Zillow to be put on his website? It would take maybe a week of development. Shall we call this feature the “Zillow Data Exchange”, or ZDX?

Sure, Postlets lacks the Offer of Cooperation and Compensation; yes, it lacks strong Compliance. But if Zillow + Postlets does take off, it would not be particularly difficult for Zillow to put in an Offer of Cooperation and create a Compliance team.

The one unique value of the MLS in the panoply of real estate technology is its control over original data entry. This is the piece that even Google with its Real Estate Places pages could not overcome. (Granted, many MLS platforms are so horrible in user interface and design that it appears sometimes as if the MLS wants to alienate its users and drive them to alternative solutions, like Postlets. But oftentimes, that isn’t the fault of the MLS’s themselves, but of the technologically backwards vendors they selected. A whole other topic….)

And that is why I’m genuinely puzzled at Zillow’s acquisition. One of three things will happen as a result.

One, Zillow will turn off the “Create your listing here” feature of Postlets. But then, the value of Postlets to its existing customers — who are using it, after all, to syndicate to sites that the MLS refuses to syndicate to — rapidly approaches zero. But this is the only way I can see Zillow coexisting with the MLS world.

Two, Zillow will promote Postlets as its syndication solution, and leave in the Add/Edit feature. In that case, any MLS that continues to work with Zillow is selflessly throwing itself on the funeral pyre so that Zillow can be reborn as the United States MLS. Those MLS’s should just save everybody a lot of time and close their doors right now; perhaps some of their people can get jobs at Zillow. Plus, it’ll take some time for their subscribers to move over to the new ZillowMLS, so might as well give them a headstart on training and moving the data over.

Three, Zillow will promote Postlets as its syndication solution, leave in the Add/Edit feature, and every single MLS in the country will pull its listings from Zillow. Brokerages, who currently have a very loud voice in governance of their MLS but have no voice whatsoever on Zillow’s Board of Directors, will have to make a decision as to which important entity to support: the MLS, or Zillow. If any MLS was on the fence about the Syndication Bill of Rights, this acquisition should push them off the fence. Note that major franchises, such as Coldwell Banker, who supply listing feeds to Zillow should look twice at the implications of this deal… and then look again.

In fact, if I’m Curt Beardsley or Errol Samuelson of Move, who acquired ListHub for a wholly different reason, I’m banging the phones hard tonight. This is an early Christmas gift from their arch-competitor.

So, we can wait to see if Zillow makes any further major announcements about Postlets, specifically regarding the ability to create listings directly within the system. But right now, less than 24 hours after the announcement, I’m left puzzled as to why Zillow would make this move given how paranoid MLS’s are right now, how much on the edge many of them are, and how troubled many of them are. Spencer Rascoff is one of the smartest guys in our industry; did he just not foresee this possibility? Did he think the MLS’s were weakened enough that he can now go to war with them directly? Or did he need to acquire a syndication firm for an upcoming IPO filing, and he fully plans to shut down the Add/Edit feature that is such a threat to existing MLS’s?

I don’t know, of course, although I would welcome any clarification.

Apart From That Whole Going to War Against the MLS Thing…

Apart from that niggling detail, yeah, this was a good acquisition by Zillow. /scratch head vigorously

Your thoughts and questions are, as always, welcome.

-rsh