Michael Wurzer Zillow is great at creating buzz, there’s no doubt about that, and their new “coming soon” feature is the latest. Others have written pretty extensively about this already, and I wrote about it indirectly over seven years ago (wow, how time flies).
Here’s my short take:
- Zillow is an advertising site;
- Brokers are competitors seeking to differentiate their offerings;
- MLS requires cooperation and critical mass;
- Advertising fosters competition more than cooperation;
- Without cooperation at critical mass, Zillow or any other advertising portal is not an MLS.
Without a doubt, Zillow could be an MLS and MLSs could cease to exist. Market forces to date, however, indicate that’s not likely.
If broker competitors were going to cooperate en masse with a portal, why hasn’t it happened yet with all the opportunities presented? Zillow long ago abandoned its mission to disintermediate brokers and agents as the market also made it clear that brokers and agents add value. Enough value, apparently, that Zillow and Trulia can be valued in the billions of dollars on the basis of revenue from brokers and agents. Those same market forces and competition will result in brokers doing their own thing, with the result being a lack of critical mass anywhere — except the MLS.
As I wrote seven years ago:
The representative decision-making process of the MLS is what allows for the broad cooperation necessary to create critical mass in terms of data sharing. Without this, I believe we’ll simply have a mishmash of data strewn here and there, with no possibility of a national repository or any other useful portal. The MLS embraces the duality of competition and cooperation, and strikes a limited balance that enables critical mass to be established. This feat should not be underestimated.
Everyone knows the data quality on the portals remains abysmal and I don’t see quality data coming soon or ever given the competitive nature of brokers.