The partnership between Homestore and MSN House & Home channel was a long time coming. The two giants slugged each other bloody for years. Now they can put their fists down and give each other what each most wants - real estate listings for MSN and traffic for Homestore. But the union raises some interesting questions, namely - why weren't resale listings mentioned?

So far, all that has been announced is that Homestore will be providing new home and apartment content for MSN's House & Home Channel, not Realtor.com listings. Even so, this is a huge deal for Homestore as MSN boasts more than 300 million unique users, and the House & Home Channel boasts 6 million unique users, making it the second most popular site in the real estate category, according to comScore Media Metrix, May 2003, says Homestore.

What's curious is that MSN didn't really need Homestore to provide apartment and new homes content. Primedia's ApartmentGuide.com provides apartment content to MSN, and Builder Homesite Inc, a consortium of builders provides new home content via its NewHomeSource.com Website to MSN. What reason is there to change partners except for a better deal?

A clue may lie in the press release sent out by Homestore, which suggests that "when the new content launches during the next few months, visitors to the House & Home channel on the MSN site will have access to more than 100,000 new home listings on HomeBuilder.com(tm) and the more than 6.5 million apartment communities on Homestore(r) Apartments & Rentals."

So it's going to take a little time. ApartmentGuide.com spokesperson Robert Turnbull, says the listings will come down probably by the end of the week.

Meanwhile both Homestore and MSN management applauded the agreement.

Homestore chief Mike Long said that the "Homebuilder.com and Homestore Apartment & Rentals sites are already the most visited new home and apartment Web sites on the Internet, we believe this relationship with MSN will significantly increase the consumer audience available to our customers."

MSN director of business development Don Holtzinger applauded the union by saying, "We're committed to providing our consumers with the best content available on the Internet, and are pleased to be working with Homestore. This agreement is consistent with MSN's strategy to focus on its core strength of delivering great communication and information services, while relying on partners like Homestore, for rich vertical content and services."

But if this agreement is so good, then why aren't resale listings included, too? This is the content that MSN most desperately needs.

Holtzinger told Realty Times, "We have high admiration and respect for a number of different home listing offerings, but today’s announcement isn’t about resale home listings. It’s about apartments and new home construction, both of which are being powered by Homestore. We have nothing to announce at this time about resale listings.

Did MSN get out of its contracts with Primedia? "Our latest apartment agreement with Primedia was 2 years in length, and its ending date corresponds with Homestore’s apartment live date," says Holtzinger. "MSN has enjoyed a solid partnership with Primedia and we don't have any additional changes to announce about the partnership at this time."

Long anxious to stop paying MLSs for listings, MSN boldly informed all MLS and broker partners that the site would no longer accept listings this year. It then announced an agreement with Primedia subsidiary Realestate.com.

Realestate.com, however, was involved in a scandal in which the company had arranged through a subsidiary or partner (the exact relationship has yet to be proven) called 1RoofTechnologies to receive listings from The Real Estate Book (TREB,). However TREB claimed that 1RoofTechnologies was not authorized to share listings with anyone other than Lycos. Realestate.com also gave the TREB listings to LendingTree in another partnership. TREB said that 1RoofTechnologies, Realestate.com, and LendingTree were in copyright violation, and it filed suit against 1RoofTechnologies. MSN did not have the TREB listings, say spokespersons, but the lack of said listings made for a less than robust listing presence against Realtor.com.

This embarrassing debacle put Homestore in a very good negotiating position. Any strong negotiator would have said "You need listings? We got 'em. But if you want 'em, we want you to take all the listings - new homes, apartments, resale."

As strong as Homestore's position is, it needs MSN as much as MSN needs Homestore.

Homestore did a good job eliminating competition in its early years, including driving MSN into retreat because of its hold on Realtor listings, and MSN's undeserved reputation as a "lion coming over the hill" to disintermediate Realtors. With the advent of Internet data display listings and virtual office Websites which allow Realtors to pursue their own traffic for their Websites and listings, Homestore's new competition is mushrooming. Sites such as HomeGain, Yahoo! and LendingTree allow agents to acquire business through referrals (another form, if you will, of advertising.) and the agents supply their VOWs or IDX solutions to give the referral partner listings they don't have to pay for to attract more traffic.

Traffic is a game Homestore has to win. The more traffic it can bring to its customers, the better chance it has of selling advertising opportunities to Realtors.

If the cost of Homestore's traffic payment is only accelerating slightly, Homestore must have provided the deal of a century to MSN, and that can only mean resale listings were included. MSN has no other reliable source of aggregated listings. A deal with Homestore would plug the hole, and it would also give Homestore something to crow about. Between the traffic the company generates alone, its agreement with AOL, and its new agreement with MSN, the company would be in a terrific position to promote itself as the traffic king with its Realtor customers.

But until an announcement comes that Realtor.com listings will be on MSN, it's all speculation.

"Homestore Inc. does not comment on speculation regarding business development activities," said a spokesperson. "When news regarding new developments is available, we will be sure to quickly and broadly disseminate that information."

Homestore executive vice president, corporate development group Allan Merrill said. "There has been no guidance from Homestore or Realtor.com that a partnership with MSN for resale listings is imminent," says Merrill.

Published: July 17, 2003

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