Approximately 250 real estate professionals filled a room at the Washington Hilton Friday morning in Washington, D.C., all of them ready for a shoot out -- a verbal shoot-out, that is. The battle lines were drawn, with Microsoft, the genuine King of All Media, on one side; and a multitude of representatives from multiple listing services and other real estate-related entities on the other. When the smoke cleared, the sides agreed to disagree, forming a tentative truce about how best to respond to the latest development in the Microsoft empire: HomeAdvisor, a site that will guide consumers through the home-purchase process, connecting buyers with lenders, agents, builders, and suppliers of new-home products.

Real estate consulting firm Clareity Consulting produced the "Shoot Out" (also called "Where the Sam Hill do we put Our Listings, and How can we Protect our Intellectual Property?") in conjunction with three of the nation's largest MLSs. Attendees at the event included Larry Cohen of Microsoft; Howard Latham of CyberHomes; John Giaimo, president of NDS' HomeSeekers; Jay Westmark of Homes & Land magazine; and Stuart Wolff of RealSelect.

Although HomeAdvisor is still in the planning stages, Microsoft is attacking its latest venture with confidence and plenty of money, spending $5 million on a print, radio, and online advertising campaign (to be created by advertising firm Anderson & Lembke and scheduled to begin in July) for the site, dubbed by Microsoft "The Best Place to Find Homes and Loans Nationwide." That approach is making the real estate industry shake in its boots. Microsoft's competitors are attempting to anticipate Microsoft's next move -- never an easy task.

"Microsoft has raised the bar of competition," said Clareity co-founder Gregg Larson in an earlier interview with Real Times. "They'll be one of the top three brands, and other companies will have to spend tens of millions to be able to compete. Microsoft will force the other guys to spend more money or get out."

Although many questions about HomeAdvisor have yet to be answered, Microsoft has said unequivocally that HomeAdvisor will contain absolutely no For-Sale-By-Owner (FSBO) listings -- a lifetime guarantee, company representatives maintain -- and will charge Realtors no referral fees. In addition, Microsoft's Cohen said during the Shoot-Out that HomeAdvisor has been designed to be "Realtor-friendly"; the site will run no competing Realtor advertisements, instead making its money through the sale of loans. The company currently is creating a multilender platform of nationwide lenders, whose identities have not yet been revealed.

Microsoft, according to Real Select's Wolff, must decide early in the game its mission statement -- whether the company's primary objective is to sell homes or Realtor services. If the company doesn't establish that mission, Wolff said, the Internet could cause agents' commissions to fall, an effect it had both on stock brokerage commissions and travel agents' commissions.

Maintaining that Realtor.com is a player to be reckoned with, Wolff added that Realtor.com is spending $30 million on an advertising campaign scheduled to make its debut in the coming months. The site already attracts an average of 3 million visitors each month.

Earlier this week, Realtor.com announced its newly formed partnership with AOL Interactive Services, the Internet online services division of America Online, Inc., which makes Realtor.com the exclusive provider of existing home listings on the AOL service, as well as on AOL.com, AOL's Web site and the number-one consumer site on the World Wide Web, and on AOL's Digital City, the nation's largest locally focused online network. The agreement brings Realtor.com's more than 1 million home listings to AOL members and users of AOL.com and Digital City through an AOL-Realtor.com co-branded site.

"We're number one now, and we expect to continue to be number one," Wolff said.

While currently it appears that the two biggest contenders for King of the Real Estate World will be Microsoft and Realtor.com, the real estate industry has come to expect the unexpected. Regardless of who's still standing in the future, you can be sure that an interesting road lies ahead for every player in the industry. It's going to be not only survival of the financially fittest, but the most creative, as well. The last man standing, says Clareity's Larson, will be the company who best anticipates the moves of Microsoft before the giant takes any steps.

Published: April 27, 1998

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