MSN House & Home’s new deal with Primedia's Realestate.com means that MLSs, brokers, listing aggregators, and agents will no longer be allowed to contribute listings to MSN.

While Primedia has yet to return inquiries on what the nature of the agreement is, how and if it plans to supply the listing portal with listings, what it is paying for the privilege, or what it has in store for Realtors as far as lead generation opportunities, or whether or not this is a multi-verticle deal (MSN also operates Carpoint.com and Primedia owns Motor Trend magazine) one thing is certain - this deal is certain to make a lot of winners and losers.

According to several MLS executives across the country, MSN House & Home, formally known as HomeAdvisor, has written letters to the executives informing them that they will no longer be posting data from MLS services, brokers, listing aggregators, or agents on the MSN House & Home Website as of March 30, 2003.

Here is the text of the letter:

This letter is to inform you about changes at MSN House and Home, formerly known as MSN HomeAdvisor. The online real estate business has changed significantly since our start in 1998. There are more consumers beginning their real estate search on the Internet, more brokers offering localized market data, and more online services available to buyers and sellers. These industry and technology developments are key reasons behind the business changes at MSN House and Home.

Beginning March 30, 2003, MSN House and Home will no longer post data from Multiple Listing Services (MLS), aggregators, brokers, or agents on the MSN House and Home Web site. Additionally, we will no longer maintain relationships with listings aggregators to provide data management for our MLS partners. If you currently deliver listings to MSN House and Home (whether directly or through a listings aggregator), the data import process will be discontinued effective March 30,2003.

MSN House and Home will focus on continued growth by providing the best tools, content, research and insight for buying, selling or owning a home. In support of that effort, we have established a new relationship with PRIMEDIA's ReaIEstate.com. We will continue to focus on providing a great online experience to consumers and marketing opportunities for our partners, while relying on our new relationship with RealEstate.com to provide property data information by working directly with industry partners.

MSN and RealEstate.com share a common goal, to attract and retain consumers through providing great content and services to consumers and partners. This new relationship will provide consolidated property data, as well as additional tools to enhance the overall breadth and depth of the consumer experience on MSN House and Home. For information about future opportunities to benefit from the marketing and distribution value provided by MSN, please follow-up directly with RealEstate.com at 800-251-0710.

MSN House and Home is working to make this transition as smooth as possible for everyone involved. Thank you again for your support. If you have questions, please caIl 1-800-284-1255.

Folks, this is news. The letter represents a major change in the listings portal business model from the last of the big-time aggregators, and that is going to have a ripple effect throughout the industry from MLSs to brokers to agents to aggregators to lead generation companies, to Website designers, to consumers. So who are the potential winners and losers?

Winners

MSN - This is a big win for MSN because they now have a paying business model. After retreating in the listings fight, including giving up its stand-alone portal name HomeAdvisor to go under the umbrella of parent MSN, the company is becoming a competitive traffic player again, at least in the advertising arena. Instead of paying for listings, MSN is getting paid to advertise listings. This is a huge monetary and philosophical reversal for the site, as the company never marketed products to Realtors directly before, and it doesn't have a business model that will depend on selling agents directly now. Further MSN no longer has to deal with 800 MLSs anymore; they only have to worry about selling advertising.

Homestore and Realtor.com - Homestore should be breaking open the champagne, as the company just scored wins on three fronts. In a previous interview with Realty Times, CEO Mike Long said that Homestore wants to pay MLSs what “reasonable market pricing” is. With MSN no longer paying MLSs, Gold Alliance agreements are no longer necessary, and the paying for listings at all may become a thing of the past, saving the company potentially several million dollars a year. More significantly, Homestore and Realtor.com are now the only listings aggregators of size and the one with far and away the most traffic, and it is now the only national aggregator of size and traffic significance that allows agents to post listings for free. Even better, the company will have an easier time selling Websites to Realtors, since it is also a built-in distribution center for listings. The company is already creating new ways to expose agents and listings in more ways besides their listings in response to competition from other companies and portals.

Personal marketing companies - Companies such as Realty Times which promote Realtors should benefit. There are two ways to spend marketing money – on listings and on personal marketing. The more portals shift away from paying MLSs to getting paid by brokers (VOWs, referral companies, etc.) to promote listings, the more agents will want personal marketing opportunities, especially if they include ways that their listings can be promoted directly to consumers at no additional cost.

Losers

HomeSeekers - This has got to be disappointing news to HomeSeekers who was getting between $600,000 and $800,000 a year to aggregate listings for MSN. That revenue stream just dried up. In addition, HomeSeekers' Web sites were promoted to real estate professionals with the customer service benefit that their listings would automatically be sent to HomeAdvisor, among other partners. Now, that's no longer true.

Other MSN-friendly Website designers - Like HomeSeekers, other Web site designers who relied on MSN to help their customers showcase their listings will be hurt. MSN offered a nice alternative to search engine placement, but now they will have to come up with other ways to drive traffic to their Website-buying customers. Alternatives exist, but many will have problems investigating choices and retooling their costs and business models to accommodate this change.

Brokers and agents - Realestate.com and MSN have not replied to inquiries as to how MSN will get listings information, or even if listings are central to the deal, but there are some obvious ideas. If Realestate.com is planning on using virtual office Website (VOWs,) as Yahoo! does, which is unlikely considering the winds of change at NAR, brokers will pay big money to be the VOW gateway. Another option, also unlikely because it doesn't aggregate enough listings fast enough, is that the site would go to a classified ad model. More likely is that the site would do a referral or advertising model (Find an agent type of model) and let the agents provide the listings through IDX agreements or VOWs. Since no agent would have an exclusive gateway, this would side-step the VOW controversy and create a pure advertising/referral model for Realestate.com that doesn't make agents mad like the Yahoo! model does.

Virtual referral companies - If Realestate.com has come back from the dead as a referral company, and it is now owned by a publicly traded company that is apparently ready to throw money at getting it positioned, then the cost of doing business just got more expensive as referral companies not only face competition from a new player, but the new player has an exclusive traffic agreement that will give it a tremendous advantage in building name recognition.

Consumers - You can’t argue that it’s better for consumers not to have access to MSN’s large number of real estate listings. At last count, the site had nearly as many as Realtor.com with well over 1 million listings. With traffic numbers running close to Realtor.com, from earlier reports, where will those people go to see listings if that's what they primarily want to see? If they want to see large numbers of listings, without user agreement hassles, they will have nowhere else to go but Realtor.com.