With the announcement that Prudential purchased all the assets of venture capital-backed eRealty, it was obvious that yet another dot-com has failed to take over the world.

Usually when a company announces that it is buying a company for its "technology," that's a way to save the faces of the buyees. Nobody buys technology because it is usually so easy to develop internally. What you really buy is the time it took someone else to iron out the kinks, so that you don't have to pay your techs to reinvent the wheel.

According to Prudential, eRealty had the smoothest-running tires on the information highway. Otherwise it was just another broker buy-out. eRealty will no longer be a brand. Its offices will no longer operate as discount brokerages. It will be "absorbed into Prudential."

What Prudential found appealing, says Abel, was eRealty's ability to "generate and incubate leads over the Internet and provide enhanced Internet tools for consumers." Prudential has been planning to adopt a new way to display listings, and the company liked the way eRealty does it.

Director of Communications Chris Abel says, "We have purchased all of eRealty, but we did so for their technology, and we will integrate their brokerages into existing Prudential real estate companies."

What makes this more than local news is the fall-out.

"They were one of top Internet real estate companies, and they followed the NAR's rules of virtual office Websites," says Abel with unintentional irony.

For nearly two years, eRealty founder Russell Capper has waged a personal war against the NAR over its virtual office Website policy. The policy as approved last May allows competing brokers to use listings directly from the MLS in virtual offices where consumers view the listings via user agreements. Brokers can opt their MLS listings out of competing brokers' virtual offices if they aren't comfortable with how or where or under what terms a competitor displays them.

Capper disagreed with this policy and his complaints, testimonies before government agencies, public relations campaigns to news media and other actions have almost single-handedly stalled implementation of the VOW policy by many MLSs and sparked the Department of Justice into investigating the National Association of Realtors over possible antitrust violations which could result in an injunction forcing the NAR to eliminate the opt-out policy.

The reason the VOW policy was written at all was because Capper, and others soon to follow, created exclusive marketing plans based on using other brokers' MLS listings that his competitors didn't foresee would happen. Mainly, eRealty advertised itself as a discount full-service broker. In the past, listings and pricing were kept strictly separate.

Some brokers were outraged that Capper was allowed to use their listings to get consumers (isn't that advertising?) and when the consumers arrived, the discount model by its very existence implied that other brokers, after generously supplying their listings, charge too much in commissions.

Still other brokers admired Capper's boldness and wanted to do the same things as Capper in their market areas, but most MLSs refused to supply the technologies without rules to abide by. They turned to the NAR to write them. Supporting the MLSs are state laws which allow brokers to choose where their listings are advertised, and if virtual office Websites are ruled by the state to be advertising mediums, then state law applies allowing the opt out. When NAR did the same, Capper brought down the legal house on the organization.

Abel says that Prudential "doesn't have a position" on the VOW controversy and prefers to leave that to the broker affiliates.

Unknown is whether or not the DOJ investigation of the NAR will go away now that main complainant Capper has crossed over to a neutral side. Some in the know say that only one side was heard, and that when the NAR and some brokers get to present their views to the DOJ, the investigation will go away anyway.

While Capper could not be reached for comment about why he sold eRealty, Abel confirmed that Capper would stay on as a Prudential employee, but it was not disclosed what Capper's title or exact duties would be. It's certain that he also has a non-compete agreement, but of undisclosed duration.

Another controversy that may dissolve is eRealty's exclusive advertising agreement with Yahoo! to provide listings in its MSAs. Some brokers and MLSs were upset that not only were they not being paid for their listings by Yahoo!, (because Yahoo! didn't actually host the listings on its Website but deferred to eRealty and others,) but that eRealty would be the only gateway to consumers, causing the NAR to address third-party arrangements in its VOW policy.

Again, Capper was unavailable to comment. Abel said he believed that the Yahoo! agreement is "month to month," so "that is going to expire," and that Prudential has no current plans to renew it.

That could be good news for Realtor.com, which is already supplying new homes and apartment listings to Yahoo!, but that's another story.

"Our focus is to get the technology up and running," says Abel, "and integrate the technology onto Prudential.com. If there are other opportunities, we will look into those."

Published: January 29, 2004

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. 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. To contact Blanche, email her at . For more articles by Blanche, click here.