Boasting about four million unique visitors monthly, the House and Home channel of MSN has traveled a rocky road when it comes to obtaining the number one attraction for real estate consumers online - listings.

Outmanuevered by Homestore for years for exclusive listings, and sometimes paying exorbitant prices to many MLSs, MSN finally decided it was time to get paid instead of paying to publish listings.

After all, other media such as newspapers have been richly rewarded for publishing listings for years. Listings mean more advertising sales which means more listings, and so on.

But, few were in a position to both pay MSN as well as supply significant numbers of listings to enable MSN to compete with other portals for advertising dollars in the real estate space.

Realtor.com has the listings, and the wherewithal to strike a deal, but not for the kind of up-front money ($7 million by some accounts) that MSN felt it deserved as the operator of a major real estate portal.

Meanwhile, Realtor.com has problems of its own.

It has to keep adding distribution in an environment where portal partners want to be paid outlandish sums for bringing them more traffic. The trick is how to get these partners to come down in price, and Homestore hit upon a rather brilliant plan, it seems.

AOL, Homestore's other resale listings partner, already has access to Realtor.com's two million listings, as well as new homes and apartments. That puts downward pressure on MSN to take less money, because no one else can come up with the listings to help MSN build its traffic for other advertisers.

AOL comes up for renewal in the summer. If Homestore already has revenue-sharing deals in place with AOL's competitors - MSN and Yahoo! - then that puts downward pressure on AOL, too. Without Realtor.com listings, where is AOL going to go for listings, and without listings, how are they going to leverage their diminishing traffic?

Unlike print media, Internet traffic is traceable. Every advertiser can download a report that outlines exactly where their traffic comes from, and any portal overcharging for their brand and under-delivering on traffic will be told in black and white.

MSN proved that without listings, bragging rights don't mean much. Now, the MSN House and Home channel is partnering with Realtor.com in a deal that will not only put listings back on MSN, it will also bring back the traffic numbers MSN would like to monetize.

Enter the "variable" deal.

For the first time ever, MSN is taking what's known in the lexicon of advertising revenues as a "variable" deal. It means the advertising medium takes some risks along with the advertiser.

If Homestore/Realtor.com can sell ads to Realtors, franchises and others, then MSN will collect on the back end.

"Our business model is to distribute listings on behalf of Realtors to consumers for free," explains Allan Merrill, Homestore's executive vice president, corporate development group, "and that is essential that our relationships work that way. They (MSN) have had some relationships that required registration or directed leads to individual brokers in the past, so we weren't able to do anything with them until they were able to accept all the characteristics of our relationship which is a tariff-free model."

In other words, advertising will be done through Realtor.com, which won't compete with MSN for that segment of the market on the portal.

Realtors, brokers and franchises can advertise and personally market themselves through Realtor.com's Featured Home(TM), Featured Agent(TM) and Featured Company(TM).

While neither Homestore nor MSN will acknowledge if Homestore paid MSN any monies upfront or how much, Homestore will share revenues from these newly available advertising positions with MSN.

"It's an advertising-based deal," explains MSN/House and Home Channel spokesperson Malina Bragg Johnson. "Homestore will share revenue from the ads they sell to Realtors, brokers and franchises on the content exposed to MSN users."

What difference does MSN anticipate Realtor.com will make to the MSN House and Home channel?

"MSN's decision to partner with Homestore as a home listings provider on the House and Home Channel is part of MSN's strategy to focus on its core strength as a consumer portal," says Johnson, "while relying on its partners for rich vertical content and services. The partnership with Homestore will enable consumers to experience more specialized and personalized content and services on MSN House & Home, including a robust database of over two million home listings."

She continues, "We considered a number of different partners for the MSN House & Home Channel, and LendingTree was one of them. MSN and LendingTree have a very strong partnership in many different areas (mortgages, car loans, credit cards, etc.), and we look forward to strengthening that relationship over time. However, for now we've chosen Homestore as our real estate partner because of the depth and breadth of content and services they provide in this space. Homestore is the clear leader in the listings category with over 2,000,000 homes for sale."

If there's any question that Homestore doesn't intend to capture all three portals, read between the lines of this statement by a spokesperson.

"Keep in mind that the three largest portals (AOL, MSN and Yahoo!) 'touch' 99 percent of all consumers using the Internet in the United States. That is extraordinary reach, and we're excited about the exposure we're giving our customers by distributing content to two of these portals… for no additional charge to our customers."

Yahoo!, it's just a matter of time.

Published: January 16, 2004

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.