The world's largest marketplace, eBay, just decided to go into the real estate business as evidenced by a new marketing and listing-enhancing agreement with HomeSeekers.com, Incorporated.

Just when it looked like Homestore had the listings arena all sewn up, eBay changes the paradigm. But eBay plans to avoid the pitfalls of enabling do-it-your-sellers, even though that is the company's culture. Instead, it plans to deliver its formidable traffic to Realtors, courtesy of industry insider, HomeSeekers, who will help Realtors market their services and capture and close the eBay community into sales.

In watching the impact of this announcement on the stock market, it's clear that investors don't quite get the significance for eBay or HomeSeekers, but that's typical. Maybe they are still too baffled over the non-election. Or, it could be that investors don't understand the real estate industry, but they should be able to wake up to some basic numbers.

eBay has 1.8 million unique visitors a day, 4 billion page views a day, and homes that are currently being shown on the auction site get 1,800 viewings in a ten-day period. And that's without the professional presentation services of a Realtor and their technology partner such as HomeSeekers. Imagine what can happen when listings look really good.

While some details and financial disclosures of the arrangement could not be discussed by the principles in the transaction due to SEC regulations, John Giaimo, president of HomeSeekers and Richard Rock, general manager of eBay's new real estate division, were in agreement that this alliance will bring a new type of exposure for real estate listings and agents.

If you are one of the ones grinding your teeth because you didn't pick up HomeSeekers stock when it was down to 25 cents a share, you're not alone. The very depression of the company's stock, coupled with its unappreciated inroads into the MLS information services arena made it ripe for plucking. The alliance with eBay can only mean that serious money is coming HomeSeekers' way, if investors stop and think about it.

Why HomeSeekers?

Why wouldn't eBay pick Homestore? Control. Two goliaths can't occupy the same board seats. Plus, HomeSeekers was in the right place at the right time, with the right deal at the right price. Think about it. A company that appears down for the count suddenly has the wherewithal to create a key alliance with the world's largest trading post, the venture capitalist's dream-come-true - eBay? Make no mistake, HomeSeekers brings plenty to the party. Second to Homestore, HomeSeekers leads the industry in providing automated lead generation tools for Realtors, including Web sites. It's one of the top sites in real estate consumer traffic, and it has forged its way to the top of the MLS information system providers, where there were only two players, before - VISTAinfo and Interealty. In the MLS business less than one year, HomeSeekers already serves approximately 125,000 agents, only a few thousand less than the 40-year, and 35-year old incumbents. It has recently secured the coveted New York City MLS contract to serve 2,600 agents. Then there are also HomeSeekers' forms products, productivity products, publishing, and more."We have lots of ways that we touch the Realtor," says Giaimo.

And HomeSeekers is experienced in the sector, something eBay needs if it is going to go eyeball-to-eyeball with Homestore and HomeAdvisor. With the demise of iOwn, CyberHomes, Mortgage.com and others, that takes some real nerve. Move.com has been neutralized. Who's left in the national listings arena?

eBay's got nerve, and deep pockets to match. Plus, it is watched over by angels. Keep in mind who backed them - Benchmark, the e-boys to beat all e-boys. Benchmark has been quietly building a portfolio of real estate-related companies for several years. The e-boys are the backers for zipRealty, who due to their benefactors, were able to snag an enviable advertising position on eBay's real estate section. Not bad for a company in only a dozen or so markets across the country. Benchmark is also a backer for Bridgespan, the online title company that has now expanded to 33 states, a company ripe to take key positions on all the new transaction platforms coming out. And if not, they can close their own deals, as they have field agent capabilities, too. HomeSeekers has cuddled under somebody's wing, that's for sure, and it's my best guess that it's the e-boys.

Whether HomeSeekers has a new backer or not isn't the point, but it's clear that the bad times are sure to be over for the beleaguered company. Anyone who hung in there for the rough storms is about to see the sun shine, including HomeSeekers existing customers who will get first crack at the eBay deal.

So what is going to be new, exciting and different about eBay's approach to wooing the real estate industry? That remains to be seen as eBay and HomeSeekers are keeping their strategy under their wing, er, under wraps.

Says Rock enigmatically, "We have come up with a process that allows real estate agents to have exposure of their enhanced listings. We could possibly get two million listings at a time in a premier position."

What about zipRealty? Brokers won't share their listings and then watch leads go to another broker. Not a problem, says Rock. "Other brokers can buy positions on the site, too" says Rock.

eBay, known for such consumer-to-consumer trading as beanie babies and rock band t-shirts, admits it isn't experienced in the real estate industry, but that doesn't mean it can't create a marketing model for homes that will please both consumers and Realtors. According to Rock, the real estate section will be handled differently that other sections on the site, with great anticipation of success. "It's not as much of a cultural shift as much as you would imagine," explains Rock. "As eBay has embraced the auto industry, we are working with dealers and now we are the third largest auto site. We have made a commitment to real estate professionals to work with them.

"Additionally, we have a creed at eBay - that we can only be as successful as our sellers and in real estate, 85 to 90 percent of our sellers are agent-represented. So it is core to my mission to help agents be successful," he says.

HomeSeekers will handle the agent marketing, however. "Different features are being developed by each side," says Giaimo. "In terms of the agent upgraded listings, those listings will be hosted on the eBay Website and formatted and hosted by HomeSeekers. There will also be marketing opportunities that will be presented to brokers by HomeSeekers."

Will agents go for receiving bids on their homes? "Real estate is different from other categories. Bidding is non-binding and that is encouraged in this category. Each listing receives, 1,800 page views on average, and the listings only last a maximum of 10 days. The value proposition for agents is a more effective means of marketing for agents."

eBay has found a way to get what Homestore has been unable to get - a piece of every transaction. Neither company would speak of the financial terms but agreed that that there is a strong revenue-sharing relationship based on fees collected.

The full rollout of the relationship is some time away, but attendees of the N.A.R. convention in San Francisco can get an early peek at eBay's new real estate site. "We have a program that we aren't prepared to announce to our customers and you will see some teaser items at the N.A.R. show. We could not be more excited for the industry. It is a new frontier and new visibility for listings."

Published: November 10, 2000

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