Editor's Note:This is the second part of a two part series. Part 1 is at: What Really Happened In Milwaukee?

CyberHomes is no longer providing listings aggregation services to the Milwaukee Metro MLS. When the MLS accepted incentives for exclusive rights to its listings from Homestore, it left the back door open for listings aggregators to contact brokers and access their data. Believing in neither exclusive listings, nor in broker-contributed listings, CyberHomes appears to be taking the high road in its retreat - but is this a strategy that will work?

In this exclusive Realty Times interview with CyberHome's president, John Mosey, CyberHomes reveals why losing a few MLSs to Realtor.com's Gold Alliance is having the opposite effect - giving CyberHomes and other national listings aggregators greater marketing advantages.

RT: Why did the Milwaukee Metro MLS give the boot to CyberHomes? Were they being gold-mailed?

JM: Just before Homestore went public, the MLSs were given additional incentives and inducements to close their other options. I know for a fact that in Chicago, the allotment was increased substantially prior to the IPO. If they wanted to qualify for warrants, they had to go exclusive.

RT: You already had the positioning with many of the MLS's brokers. Why didn't you create a broker direct program similar to HomeAdvisor and just bypass the MLS?

JM: "When the MLS excludes us, we go on to the next one. My personal belief is that it is a matter of time before that changes. We will focus on where we are, and where we can deliver value on a comprehensive inventory. We will wait for the Gold Alliance market to come available.

RT: How many markets have you lost to the Gold Alliance?

JM: We have lost six markets, but we've added 35, so we aren't sitting idle. That includes some large markets like the Southwest MLS (Albuquerque,) Houston, Infolink (Silicon Valley, San Jose) and others. These are big markets that believe in exposing the inventory as widely as possible.

RT: Realtor.com's main advantage besides revenue-sharing is traffic. What are you doing to increase value to your MLS listing partners?

JM: The Yahoo! alliance is open to anyone of the MLS and its brokers. They can achieve brand identity on Yahoo, for both the MLS and broker. We provide a linking mechanism where the listings are sourced from the MLS. Everything that comes up will indicate that it is provided by the MLS. We are compiling the data of behalf of the listing partners. If you open a page you will see that the information is brought to you by the contributing MLS. We have extended that into the Yahoo! audience, over 47 million registered users and well over 80 million visitors a month.

RT: How much traffic does the real estate portal on Yahoo! deliver?

JM: I don't know, but I do know the traffic being driven from Yahoo is a big chunk of our traffic, and it has been growing. It is a benefit to our content partners and good exposure for them. We are helping the MLS content partners understand that there is value in the increased exposure through this alliance. More MLSs are participating as they have matured in understanding how the web works and how they can control their information and retain their goal of keeping the agent at the center of the transaction. They are beginning to see the value of the Internet as advertising as opposed to a threat of disintermediation.

RT: Do you believe that Internet traffic is fairly confined to a few key sites like Homestore and Yahoo!?

JM: HomeAdvisor just put out information about overlapping traffic, and it is not significant. The exposure they bring to the listings on HomeAdvisor is not duplicated, not an overlap to Realtor.com and across the board.

RT: Why do you suppose there isn't more overlap?

JM: They (HomeAdvisor) bring that audience and all the users of the various services get directed to HomeAdvisor for real estate information. Like television, I think the average user is tuned to their favorite channels on the Internet. Another aspect is familiarity and preference. Some of our surveys show preferences. The consumer likes the way a site works, for example.

I thought the most interesting statistics came from the California Association of REALTORS®. In California, 76% of home buyers were referencing Realtor.com and 71% were referencing Cyberhomes. Then they go to the agent sites. They were using an indexing process that helped them establish a comfort level. It was overwhelming - once they were more engaged, they went to broker agent sites. They also don't go back as frequently to the national sites.

RT: In other words, once they look around, they choose an agent.

JM: That's our role, we connect consumers to the agents. We hand them off to the real estate professional.

RT: So what's the disadvantage to these brokers only being showcased on one site?

JM: The biggest one is that MLSs, brokers, and agents who have tied themselves to exclusive relationships are diminishing what they are deliver up to their clients. They have cut themselves off from a huge opportunity to promote themselves and their properties. It's odd because it doesn't cost them anything.

RT: But if revenues are the name of the game, why would an MLS like Milwaukee Metro MLS care? They accused you of "embarrassing" revenues, and they say that's why they ended their contract with you.

JM: The royalty check (sent to Milwaukee Metro MLS) is a reflection of revenues of actual business we did in Milwaukee market. We got off to a rapid start building the business side, and then we had to turn our attention toward sustaining our content. The real estate industry is tight-knit. They believe it was good to support Realtor.com at the expense of others.

RT: So you're saying that the reason you couldn't deliver better revenues is because you were busy defending territory instead of developing it?

JM: Yes. Instead of growing services, CyberHomes had to defend territories. Then there were other complications. Moore Data provides technology services for many of these same MLSs. We didn't want to have CyberHomes in conflict with any entity. It hurt and it helped, but we couldn't be as aggressive as HomeAdvisor. One thing we did have is the trust level. According to the Clareity report we are still the number two site in terms of listings.

RT: Despite providing services through Moore and CyberHomes, do you think the real estate industry views you as an outsider and Realtor.com as an insider?

JM: We have never been in opposition of the goals of real estate.

RT: What about brokers who still want their listings on CyberHomes

JM: We will do it, but it depends on whether they have a sufficient presence in their market and if we have a relationship with a broker. We have over 500 brokers in Philadelphia sending listings. It is more expensive and unsatisfying to the consumer when it isn't complete. It hurts. My view is that unless we are looking at the people who come to the site, we are not serving the brokers and agents. If someone comes to a broker-contributed site, the database is usually incomplete, not current, and it doesn't have the quality of an MLS-contributed site. If it isn't good for the consumer, and it isn't good for the agent. If you go broker by broker you will still come up way way short.

RT: So you will continue to pursue MLSs instead of brokers?

JM: Comprehensive coverage for each market has always been at the heart of CyberHomes. To do our jobs well, we need to serve consumers, the MLS and the MLS members. By providing complete market coverage, qualify data from professional sources and daily updates, we are able to serve all of our customers.