Zillow Acquires IDX Vendor Diverse Solutions, What Does It Mean?

Nov 2, 2011 Michael Wurzer

Zillow announced today that it acquired IDX vendor Diverse Solutions for $7.8 million in cash and stock.  I’m interested in learning what others think about this acquisition.  Here are some of my initial questions and thoughts:

  1. Zillow likely acquired Diverse primarily as a way to build relationships with more MLSs. We know Trulia has been amping up its efforts to establish relationships with MLSs and this move by Zillow seems like a response to those efforts.
  2. Zillow has said that 60% of its revenue is coming from sales to brokers and agents, so adding IDX products to the mix jives with their primary sales target.
  3. Diverse has IDX data from quite a few MLSs but their license agreements won’t allow Zillow to use that data for any purpose other than IDX.  However, I can imagine quite a few interesting products that can be built on top of IDX data that will blur the lines of what Zillow/Diverse offers their IDX customers.  This will be the most interesting development to watch.
  4. Will Zillow offer its ad network to brokers and agents using Diverse’s IDX product as a potential revenue share opportunity?  Will that be interesting to agents and brokers?
  5. Will Zillow try something like Roost tried initially, with an aggregated IDX portal?
  6. What will the MLS response be to this acquisition?  Quite likely many will be digging out their contracts with Diverse to make sure the license agreements lock down the data tight regarding usage.

Overall, this is an excellent move by Zillow and a nice win for Justin LaJoie and the entire Diverse Solutions team. Congratulations to all of you!